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2018 DIGILAW 1309 (RAJ)

Johnson Johnson Private Limited v. State of Rajasthan, Medical

2018-05-17

SANJEEV PRAKASH SHARMA

body2018
JUDGMENT AND ORDER : Sanjeev Prakash Sharma, J. 1. The brief facts which are culled out from the writ petition are that the respondent-Rajasthan Medical Services Corporation Limited (hereinafter referred as 'RMSCL') a Company owned and controled by the State Government, invited bids for supply of surgical equipment and sutures which included Regular Sutures, Synthetic Absorbable Sutures and Synthetic Absorbable Antibacterial Triclosan Coated Sutures vide its NIT dated 15.07.2016. The E-bids for the contract-cum-supply and empanelment was invited. The last date for submission of online bids was 28.8.2016 which was later on extended upto 14.10.2016. As per the said NIT, a comprehensive bid consisting of technical and financial bids was to be submitted in two parts known as technical bids and price bids. Bidders were to be either manufactures having valid manufacturing lincense or direct importers holding valid import license with three years market standing as manufacturer/importer. All bidders were required to submit attested copy of the license duly approved as well as Market Standing Certificate issued by Licensing Authority. Further it was submitted that price bid of only those bidders will be opened who were eligible of technical evaluation and inspection. The technical evaluation was to be conducted in two stages namely; evaluation on basis of document and secondly on examination/testing of samples for the purpose of two sample units of each quoted items which were also required to be quoted alongwith the bid. 2. Petitioner and the respondent have admittedly applied and submitted their bids for all kinds of sutures. The item Synthetic Absorbable Antibacterial Triclosan Coated Sutures was amended and the word "Triclosan" was deleted and thus Synthetic Absorbable Antibacterial Coated Sutures were required which related to items at Serial No. R-68 to R-74 in the total items as serially mentioned in the bid. The petitioner has challenged the inclusion for grant of bid in favour of respondent No. 6 Company so far as Item No. R-68 to R-74 are concerned. While the petitioner Company has been placed as L-2, respondent No. 6 Company (earlier named as Covidien Healthcare India Private Limited (hereinafter referred to as CHIPL) which thereafter merged with India Medtronic Private Limited (hereinafter referred to as 'IMPL') and it was placed on record as respondent No. 6, has been placed at L-1 with regard to the said items. 3. 3. Case of the petitioner before this Court is that respondent No. 2 opened the technical bids on its website on 14.10.2016 wherein CHIPL quoted its sutures with brand name "Polysorb" in both kinds of sutures apart from petitioner and respondent No. 6, one other bidder i.e. respondent No. 7 had quoted for Item No. R-68 to R-74. It is one of the submission of the petitioner Company that the CHIPL had quoted the same product in both the categories i.e. Absorbable sutures as well as Synthetic Absorable Antibacterial Coated Sutures. It is his submission that when a departmental communication was issued by the respondent-Corporation for sending the samples of the three bidders for testing to an accredited empaneled lab, namely Oasis Test House Limited for requisite clinical evaluation/testing, the CHIPL product was returned with a note that the lab does not have the testing facilities as per the testing procedure provided by the CHIPL vide its letter dated 23.12.2016. At the same time sample wise test reports of petitioner and the other bidder namely respondent No. 7 were tested for anti bacterial efficacy and it was found that product of the petitioner as well as respondent No. 7 was possessing anti-bacterial efficacy of coated sutures via zone of inhibition. It was thus found to be responsive for four bacteria's namely:- (1) Staphylococcus Aureus (2) Escherichia Coli (3) Staphylococcus epidermidis (4) Salmonella Abony 4. Case of the petitioner is that so far as respondent's No. 6 product is concerned, it was also quoted for the category of R-9 to R-18 i.e. Synthetic Absorbable Sutures as well as for R-68 to R-74 i.e. Absorbable Antibacterial Coated sutures. However, the regulatory documents did not specially related to import of Antibacterial Coated Sutures. Respondent No. 2 sent the product sample of respondent to University Innovation Cluster- Biotechnology (UIC-B), Centre where it was tested as per the procedure and the same was found only responsive to one particular bacteria i.e. S. Aureus (+20%) and for another bacteria E.Coli it was found to be -3%. It was also noted that the sample sutures of respondent CHIPL have bacteriostatsic properties while the sutures of the petitioner had bactericidal properties. 5. The petitioner has assailed the action of the respondent in declaring respondent No. 6 as responsive in the technical bid for synthetic absorbable anti bacterial sutures. It was also noted that the sample sutures of respondent CHIPL have bacteriostatsic properties while the sutures of the petitioner had bactericidal properties. 5. The petitioner has assailed the action of the respondent in declaring respondent No. 6 as responsive in the technical bid for synthetic absorbable anti bacterial sutures. It is his contention that the respondent could not have been declared responsive (suitable) in the technical bid because while the same product was found to be non-responsive for synthetic absorbable sutures wherein for Serial No. R/9 to R/13 it was declared non-responsive, the same product has been declared responsive for Item No. R-68 to R-74. 6. On 24.01.2017 the respondents had issued a list of technical responsive and non- responsive bidders in relation to all the items except Item No. R-68 to R-74. In the said documents dated 24.1.2017, it was mentioned that for Item No. R-68 to R-74, Financial bid was opened subject to responsiveness/non responsiveness of these items which was to be decided after receiving of laboratory test report (regarding antibacterial coating) and technical/clinical evaluation report. However, it is submitted that before the technical evaluation was conducted and the technical bid was finalised for R-68 to R-74, purchase Committee opened the financial bid for the said items also and the respondent No. 6 was declared L-1 in relation to Item No. R-68 to R-74. 7. The petitioner, therefore, preferred an appeal on 5.4.2017 under Section 38(1) of the RTPP Act which was rejected on 21.4.2017. The second appeal was preferred which too was rejected by the appellate authority. The petitioner, therefore, preferred writ petition before this Court. However, during the pendency of the appeal, letter of acceptance was issued in favour of respondent Nos. 6 & 7 and agreements for supply was also executed on 4.4.2017. 8. Learned Counsel for the petitioner submits that the award of contract and the procedure adopted by the respondent was wholly illegal and contrary to the provisions of the act. It is his submission that while the petitioner sutures were found to be having bactericidal properties with efficacy relating to 14% counts of strains of bacteria, respondent No. 6 sutures were not bactericidal but having merely bacteriostatsic properties and that too with limited efficacy. 9. It is submission of the petitioner that respondent's No. 6 product had not been tested by a duly accredited or ISO certified laboratory. 9. It is submission of the petitioner that respondent's No. 6 product had not been tested by a duly accredited or ISO certified laboratory. Another submission of the petitioner is with regard to evaluation and the procedure laid down for bidding. It is submitted that RMSCL had laid down general instructions for the bidder while inviting bids and the procedure for opening of technical bid and technical evaluation was also laid down as under : - "7. Opening of Technical Bid and Technical Evaluation (a) The Bid will be scrutinized by Bid evaluation committee and inspection of manufacturing unit for compliance of GMP may be carried out by technical committee. Price Bid (BOQ) of the Bidder found eligible on satisfying the criteria for technical evaluation and inspection, will only be opened. (b) Technical Evaluation:- Technical Evaluation of the Bid will be done in two stages: (i) Technical Evaluation on the basis of documents. This is to examine whether the bidder qualifies as per given eligibility and other prescribed conditions. (ii) Evaluation/Examination/Testing of samples of Items. Bids of the item, samples not found technically fit in such evaluation will be declared as rejected/non-responsive." 10. However, the technical bid of the item No. R-68 to R-74 was finalized much later than the opening of the financial bid. Thus, the petitioner submits that the respondent having known the financial bid put up by respondent No. 6 proceeded to get their product declared responsive by one way or the other. It is submitted that the product which was imported by respondent No. 6, the word used are 'Polysorb' but Polysorb sutures and the test conducted by the University Laboratory cannot be said to be authentic as it was not recognized lab and was merely a University Innovation Cluster department of bio Technical Centre for converging technologies of University of Rajashan, Jaipur who submitted their report conducted without any authentication. On the other hand, the petitioner product was duly tested from the ISO 900/200 Certificate which had given a Certificate of analysis namely OASIS. The method carried out for the purpose of conducting the bio-bacterial efficacy was also mentioned. In the circumstances, it is submitted that the respondents have acted in contravention of the Section 13(2) of the Rajasthan Transparency in Public Procurement Act, 2013 and also in contravention of Rules 55(11), 57 and 63 of the Transparency Rules. The method carried out for the purpose of conducting the bio-bacterial efficacy was also mentioned. In the circumstances, it is submitted that the respondents have acted in contravention of the Section 13(2) of the Rajasthan Transparency in Public Procurement Act, 2013 and also in contravention of Rules 55(11), 57 and 63 of the Transparency Rules. The justification sought by the respondents contending that the technical examination of the bids is likely to take sometime could not be a reason for opening the financial bid. The further submission of the petitioner is that the same product which was held to be technically non-responsive for ordinary sutures could not be held to be technically responsive in antibacterial coated sutures. It is submitted that while the product of the petitioner was bactericidal, the product of respondent No. 6 was bacteriostatsic and did not kill bacteria at all, rather it was negative towards most common bacteria namely ecoli. Further petitioner has also submitted that the relevant documents including the license Market Standing Certificate, sale invoice etc. the word 'regulatory compliance' relating to manufacture turnover and past performance had not been made available. It is submitted that the import license filed by respondent No. 6 alongwith its additional affidavit does not term the merit of anti bacterial coated sutures. 11. In support of the said submissions, the learned Counsel has taken this Court to the provisions of Rules 122A, 122B and 122(E) (B) of Drugs & Cosmetics Act & Rules, 1940 to submit that while respondent had a license for Polysorb which refers to anti bacterial coating and was being narrated by the respondent in earlier bids, for the first time he has quoted this product as being anti bacterial without complying with Rule 122E. Learned Counsel has taken this Court to the import license which does not permit import of anti-bacterial coated sutures. Thus, the respondent could not have been included for the purpose of the product. 12. Per contra, Counsel for respondent No. 6 submits that he was not impleaded as party to the first appeal preferred by the petitioner nor in the second appeal and only in the writ petition preferred by the petitioner he was impleaded as a party. The contention of the petitioner that the bid was required to be opened at different stages is wholly misconceived. The contention of the petitioner that the bid was required to be opened at different stages is wholly misconceived. Counsel has submitted that under the Rajasthan Transparency in Public Procurement Act, 2012 (hereinafter to be referred as 'Act of 2012') Section 13 would not apply as the bid was on E-Portal and not on envelopes. Thus, the contention of the petitioner that the financial bid could not have been opened before the decision on the technical bid is clearly erroneous. It is his submission that when E-Bid is filed, the evaluation is conducted under different procedure. It is further submitted that the bid is not a two stages bid and the procedure as prescribed under Rule 55 for two part bid would not be applicable to the facts of the case as there is no such outer envelopes where both the envelopes are marked technical and financial bid. It is submitted that the procurement process adopted in the present case was an E-procurement as per Rule 5 of the Rules of 2013. Procurement procedure of E-procurement is as specified for this purpose on the State Public Procurement Portal. The system of opening of such E-portal was on single cover system when all the bids are opened at the first instance itself. The procedure for which E-tender is laid down on the portal. 13. Learned Counsel further has referred to Section 32 of the Act of 2012 to point out that the present case was not of two stages bidding wherein at the first stage of bidding the procuring entity to formulate detailed specifications or identify specific characteristics for the subject matter of procurement, without receiving inputs regarding its technical aspects from bidders and after the said bid is finanlised then the second stage would arrive for financial bidding. It is stated that as many as 100 bids were invited for different items and there were in all 118 items. All the parties were required to put their documents on the E-Portal and at that time no objection was raised and when the bids were opened obviously the technical bid as well as financial bid opened simultaneously. However, in the case relating to product No. R-68 to R-74, it was specifically mentioned that so far as the product a Items Nos. However, in the case relating to product No. R-68 to R-74, it was specifically mentioned that so far as the product a Items Nos. R-68 to R-74 is concerned, financial bid will be opened subject to responsiveness/non responsiveness of these items which will be decided after receiving of laboratory test report and technical/evaluation report. The financial bid was held to be opened on 24.1.2017. Thus, when the financial bid was opened for the other products other than items No. R-68 to R-74 also, naturally the financial bid relating to R-68 to R-74 has also be opened. The responsiveness relating to other products for which the petitioner as well as the respondent had submitted their bids were already declared before the financial bid was opened on 24.1.2017. The technical bid for R-68 to R-74 product was later on opened and the petitioner as well as the respondent were all found responsive whereafter the respondent who was L-1, was granted contract for the product at Items Nos. R-68 to R-74. It is submitted that the product evaluation report is only required to see whether the product reaches to the bench mark as provided under the bid document. Since the product of all the three bidders was antibacterial all three bidders were declared responsive. It is submitted that while the total value of products quoted by the respondent No. 6 at Item No. R-68 to R-74 came to valuation of Rs. 32.27 Crores, the quote of product of respondent No. 7 was valued at Rs. 38.393 Crore whereas that of the petitioner was Rs. 45.062 crores. Thus, there was a vast difference between the price quoted by the petitioner vis-a-vis the respondents. The work order was already issued to the respondent on 16.1.2018. 14. Having heard both the Counsel and the Counsel for the State, I find that the E-bids were invited for sutures while indeed Synthetic Absorbable Antibacterial Triclosan Coated Sutures i.e. product R-68 to R-74 by respondent No. 2 Government Company. It was required to follow the procedure as laid down under the Act of 2012 and the rules framed therein known as Rajasthan Transparency in Public Procurement Rules, 2013. A look at the bid documents show that the bid required a sutures of different qualities and public products. One of the said sutures was Synthetic Absorbable Antibacterial Triclosan Coated Sutures. Vide corrigendum the word 'Trilosan' was deleted. 15. A look at the bid documents show that the bid required a sutures of different qualities and public products. One of the said sutures was Synthetic Absorbable Antibacterial Triclosan Coated Sutures. Vide corrigendum the word 'Trilosan' was deleted. 15. Antibacterial coated sutures are of two types namely bactericidal (bacteria killing) or bacteriostaic (inhibiting bacteria). All the three parties before this Court were admittedly dealing with sutures and their product was considered and examined by the authority minutely and their product was found antibacterial. 16. The first contention of the petitioner is that the E-bids to financial bid could not have been opened before the technical responsiveness had been finalised. This Court finds that since the procedure adopted was as required under Rule 5 of the Rules of 2013 which provided for E procurement, the contention of the petitioner relating to Section 13 of the Act would not apply. The financial bid and the technical bid have to be submitted together. An E-bid procedure and the opening of such E-Portal was on single cover system where all the bids are opened at the first instance itself. Hence, when the financial bid for the various products i.e. from Item No. R-1 to R-78 were to be opened, R-68 to R-78 financial bid of the three bidders namely the petitioner and the respondent Nos. 6 & 7 could not have been withheld and keeping in view that the financial bid was subject to the technical responsiveness of the product, it cannot be said that any illegality has been committed by the respondents in opening the financial bid for product R-64 to R-78. 17. The second contention of the petitioner that the product of the petitioner was of better quality than that of respondent No. 6 as its product was bactericidal and responsive against four different bacterias while the product of respondent was bacteriostatsic and was only responsive against one single bacteria and, therefore, the petitioner's product ought to have been considered and the product of respondent No. 6 ought not have been considered is not made out. Admittedly both the products are anti-bacterial. The requirement under the tender was only with regard to anti-bacterial and not with regard to bactericidal or bacteriostatsic. Hence, this Court would not add or give further meaning to the word anti-bacterial. Admittedly both the products are anti-bacterial. The requirement under the tender was only with regard to anti-bacterial and not with regard to bactericidal or bacteriostatsic. Hence, this Court would not add or give further meaning to the word anti-bacterial. Although it would be always advisable for the departmental authorities to have taken a decision after comparing the products after getting the same examined from an expert Committee of the doctors who used the said surgical sutures, but since it was not a pre-condition in the contract, this Court would not add such a condition to it and on that count the action of the department in choosing the product of respondent No. 6 as responsive cannot be faulted. 18. The third ground taken by the petitioner regarding the registration of the product of respondent No. 6 under the Drugs & Cosmetics Act, suffice it to state that such a requirement could not be said to be a material requirement for the purpose of contract, nor it is a case which the petitioner had put up before the appellate authorities. In the circumstances, the said contention of the petitioner is also rejected. 19. The last contention of the petitioner with regard to the respondent's product being not tested on technical side by recognized lab, I find that such a submission although appears to be attractive but is without any basis. Contention that the product of the respondent ought to have been tested by an empenalled accredited ISO mark Lab alone is without any basis as there is not such condition laid down in the contract. From the perusal of the bid documents, it is apparent that the question of the lab having a certificate of expertise would not mean that the other testing organization would be incapable to conduct the said testing procedure which is provided by the manufacturer. Admittedly the product of respondent No. 6 could not be tested by the Lab where the product was sent as they did not have the infrastructure. However, from the perusal of the original file and the order sheets, I find that the product of all the three bidding companies were sent. Firstly to the Oasis test house, it returned the product of respondent No. 6 on the ground of non-availability of testing procedure in their test house. The said product of respondent was sent to CRI Kasoli. Firstly to the Oasis test house, it returned the product of respondent No. 6 on the ground of non-availability of testing procedure in their test house. The said product of respondent was sent to CRI Kasoli. M/s Amol Pharmaceuticals Pvt. Limited who has also returned the product on the ground of non- availablity of facility with them to conduct the said test. It appears that the procurement agency thereafter contacted the University Innovation Cluster by technology Centre of Conversion Technologies to take their opinion. The said official of University Innovation Cluster accepted to conduct the test of the product and thereafter submitted its report wherein it was found that it was having bacteriostatsic and bactericidal product treated as anti bacterial product of the respondent No. 6 was found to come within the standard of bench mark. 20. From the order sheets, it is also revealed that procurement agency has thereafter for further satisfaction sent the samples to CRI, Kasauli and letter was sent to the Director, CRI, Kasauli on 17.2.2017 alongwith the product of all the three bidders but CRI, Kasoli has returned the product and informed that lab does not perform the test for antimicrobical activity/effectiveness of antimicrobial coating as per USP on the surgical sutures. The technical opinion in this regard was taken by forming a Committee of Director and representative of the Drug Control and they submitted their site report holding that all the three products offered by three bidders would come within the ambit of being anti bacterial. Thereafter, the matter was also sent to the SMS Hospital which also found that all three samples were in accordance with the specification of the bids. In the circumstances, it was the sample of respondent No. 6 that was approved. Thus, this Court is satisfied that the respondents have taken all possible measures for reaching to a decision of approval. 21. In the aforesaid backdrop, it would also be appropriate to examine the matter with reference to the law which governs the field in relation to contractual matters. Thus, this Court is satisfied that the respondents have taken all possible measures for reaching to a decision of approval. 21. In the aforesaid backdrop, it would also be appropriate to examine the matter with reference to the law which governs the field in relation to contractual matters. In Sterling Computers Limited vs. M/s M & N Publications Limited and Others, (1996) AIR (SC) 51, the Court has held that under some special circumstances a discretion has to be conceded to the authorities who have to enter into contract giving them liberty to assess the overall situation for purpose of taking a decision as to whom the contract be awarded and at what terms. It has also been observed that by way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. 22. In Tata Cellular vs. Union of India, (1996) AIR (SC) 11 a three-Judge Bench after referring to earlier decisions culled out certain principles, namely, (a) the modern trend points to judicial restraint in administrative action, (b) the court does not sit as a court of appeal but merely reviews the manner in which the decision was made, (c) the court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible and (d) the Government must have freedom of contract and that permits a fair play in the joints as a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. Hence, the Court has laid down that the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala-fides. 23. In Master Marine Services (P) Ltd. vs. Metcalfe & Hodgkinson (P) Ltd. and Another, (2005) AIR (SC) 2299 it has been ruled that the State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. 23. In Master Marine Services (P) Ltd. vs. Metcalfe & Hodgkinson (P) Ltd. and Another, (2005) AIR (SC) 2299 it has been ruled that the State can choose its own method to arrive at a decision and it is free to grant any relaxation for bona fide reasons, if the tender conditions permit such a relaxation. It has been further held that the State, its corporations, instrumentalities and agencies have the public duty to be fair to all concerned. Even when some defect is found in the decision-making process, the court must exercise its discretionary powers under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a legal point. 24. In Michigan Rubber (India) Ltd. vs. State of Karnataka, (2012) 8 SCC 216 , the Court referred to the earlier judgments and opined that before a court interferes in tender or contractual matters, in exercise of power of judicial review should pose to itself the question 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 judicial conscience cannot countenance. Emphasis was laid on the test, that is, whether award of contract is against public interest. 25. Counsel for the petitioner has cited several judgments to submit that there is an inherent imbalance in the entire action of the respondent and there was an unwanted hurry as the Transparency Act does not term discretion for alternate procedure. It is further submitted that the procedure that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all and such a principle has to be strictly followed in contractual disputes. In support thereof, he relies on law laid down by the Apex Court Central Coalfields Limited and Another vs. SLL-SML (Joint Venture Consortium) and Others, (2016) 8 SCC 622 26. However, after having noted all the facts and the law, this Court finds that each and every judgment has to be applied to the facts and circumstances which may arise in the given case. It is not to be made of a cut, copy and past process. However, after having noted all the facts and the law, this Court finds that each and every judgment has to be applied to the facts and circumstances which may arise in the given case. It is not to be made of a cut, copy and past process. The law propounded in a given judgment has to be applied on given facts and it is to be noted where the facts in which the judgment was pronounced would be of similar nature to the given facts found in the present case so that the law is followed verbatim. Otherwise a single word or a single circumstance can change the entire scenario and the interpretation of law has to be determined in the facts which are presented. What can be corrected, possible and plausible in certain facts may not be found to be corrected in a different set of facts 27. In the present case, as noted, there was a minimum benchmark laid down and once the product reached to that benchmark, the procurement agency has thought it proper to guide itself and choose a product which is technically sound and at the same time cost effective. Thus, there has been an objective assessment. There has been a detailed appreciation at the level of the procurement agency and decision taken by them for a product which they required ought not be disturbed by applying legal jargane. Let the experts have their own say and decision. 28. This Court is completely on a weigh to such decisions. It is although true that a lawyer and a Judge are supposed to have knowledge in each fields but they cannot chose to deal with matters relating to public health and decided which product would be more suitable where a decision is taken manifestly, in consonance with the requirement. This Court is loathe to interfere in the circumstances. The product which has been approved and finalised cannot be said to be of sub-standard quality or that it was not in conformity with the requirements of the bid. 29. It is a settled law that Court would only interfere if the decision making process is in any manner contrary to the provisions of law. The product which has been approved and finalised cannot be said to be of sub-standard quality or that it was not in conformity with the requirements of the bid. 29. It is a settled law that Court would only interfere if the decision making process is in any manner contrary to the provisions of law. However, the decision is not a subject matter of judicial review as has been held by the Apex Court in the case of State of Bihar vs. Bal Mukund Shah, (2000) AIR (SC) 1296. 30. In view of the aforesaid analyses, I do not find any reason to interfere with the decision of the procuring authority. In view thereof, the order passed by the appellate authority does not call for any interference and accordingly the writ petition is dismissed in the facts and circumstances.