Oil and Natural Gas Corporation Ltd. v. Prabal Sharma
2021-06-29
MANASH RANJAN PATHAK, SUDHANSHU DHULIA
body2021
DigiLaw.ai
JUDGMENT : SUDHANSHU DHULIA, J. Heard Mr. G.N. Sahewalla, learned senior counsel, assisted by Mr. K. Choudhury and Mr. M.K. Mahanta, learned counsel for the appellants. Also heard Mr. M.K. Choudhury, learned senior counsel, assisted by Mr. P. Bharadwaj, learned counsel, appearing for the respondents. 2. Both the writ appeals have been filed by the appellants challenging the order dated 2.3.2021 passed by the learned Single Judge in WP(C) No. 3230/2020 and WP(C) No. 3079/2020, by which the writ petitions of the private respondents have been allowed. The issues raised in both the writ petitions were common, hence they were disposed of by a single order. 3. The petitioners before the learned Single Judge were carrying on the supply and distribution of medicines in Sivasagar District of Assam. In Sivasagar District, Oil & Natural Gas Corporation Ltd., i.e., ONGC, has a huge presence. ONGC has its office at Sivasagar and it carries its works of drilling and oil exploration in that area. The petitioners were earlier supplying medicines to the employees of ONGC but now they are aggrieved as ONCG has now come up with a new policy. In its new tender notice dated 27.7.2020, which was issued by ONGC, it has invited online bids for empanelment of retail chain pharmacies/chemist shops for supply of medicines and consumables against credit notes, by laying down some pre-condition qualifications for the bidders. The case of the petitioners was that they were being discriminated and were denied a level playing field by imposition of these pre-conditions, such as a bidder must have at least twenty numbers of retail pharmacy outlet and thirty numbers of pharmacists on roll; turnover of bidder should be Rs. 9,08,19,500 and the minimum net worth of a bidder must be Rs. 2,72,45,850. All these conditions the petitioners are admittedly not able to meet. The case of the petitioners was that earlier they were eligible and were having business with ONGC for supply of medicines but now they have been discriminated due to the present pre-conditions. Another argument, which was placed by the petitioners before the learned Single Judge was that the land was acquired from the people of Sivasagar by ONGC and they have been carrying out their businesses with ONGC for long and in fact the conditions are such that not only no one in Assam but nobody in the entire North East can meet such conditions.
The eligibility and experience of the bidder, which were given in B.1.2, are as follows “B. 1.2 Eligibility and experience of the bidder B.1.2.1(a)-I(i) Bidder (i.e., Single bidder/Indian Joint Venture Company Incorporated) should have at least twenty owned operational pharmacy outlets. B.1.2.1(a)-I(ii) The bidder should also have at least thirty pharmacists on their roll with valid licences issued by State Pharmacy Council/Indian Pharmacy Council under Pharmacy Act, 1948 of other relevant Acts. To this effect, i.e., clauses B.1.2.1(a)-I(i) and B.1.2.1(a)-I(ii), valid trade licence (issued by respective State Govt. authorities), Drug Licenses (issued by State Pharmacy Council/Indian Pharmacy Council under Pharmacy Act, 1948 or other relevant Acts) and other statutory licences issued by the local body/authority should be enclosed with the bid. Above licences should be valid as on the date of opening of techno-commercial bid. Bidder should submit an undertaking to keep these licences valid throughout the contract period and will produce as and when required by ONGC. B.1.2.1(a)-I(iii) The bidder should have minimum three years of experience in similar services, viz., stocking and disbursing the medicines and other hospital related materials/consumables to the employees of Government Department/State or Central Public Sector Companies/Public Limited Company through the retail out let. B.1.2.1(a)-I(iv) Bidder should have executed at least 01 (one) contract of similar nature for a minimum duration of one year, viz., stocking, disbursing the medicines and other hospital related material to the employees of Government Deptt./State or Central Public Sector companies/Public Limited company through the retail outlet in the last 5 years and should submit documentary evidence to this effect in the form of satisfactory completion of services from the clients. In case of running contract of more than one year duration which is not yet complete, same shall also be considered towards meeting BEC clause B.1.2.1(a)-I(iv), if the bidder has executed the running contract for at least one year duration. In this regard, bidder shall submit copy of contract along with certificate from client. B.2.6.0 Criteria for ascertaining financial capability: All the below mentioned applicable financial criteria shall be met by the bidders, as applicable for procurement of service contracts: 1 Turnover of Bidders Rs. 9,08,19,500 or more. 2 Networth of Bidder Rs. 2,72,45,850 or more. The turnover of bidders to be considered for evaluation shall be the average turnover of the last two years as brought out at note (iv) below.
9,08,19,500 or more. 2 Networth of Bidder Rs. 2,72,45,850 or more. The turnover of bidders to be considered for evaluation shall be the average turnover of the last two years as brought out at note (iv) below. Subject to provisions under second paragraph of Note (i)-a, Net-worth shall be based on the latest Audited Consolidated Annual Financial Statements of the bidder with all its subsidiaries. In case of Two-Bid System, in the un-priced bid, the bidder will submit a ‘certificate of compliance’ (as per format attached at Annexure D relevant to Annexure IV to the effect that the financial parameters of the bidder are equal to or more than required value as applicable. In case the information contained in the ‘certificate of compliance,’ is found to be incorrect later on after opening of price bids, then their bids will be rejected in case the bidder is not actually meeting the required financial criteria.” 4. The reasons why the new conditions were being laid down were explained by the learned senior counsel for the ONGC, Mr. G.N. Sahewalla. According to him, it was a well thought decision of the ONGC Board where it was decided that it would be better for the employees of ONGC to get their medicines from a single source. 5. From the averments and the documents submitted by the learned senior counsel for ONGC before the learned Single Judge as well as before this court, it is abundantly clear that the decision of ONGC to introduce “Retail Chain Pharmacy” system is a well thought out and well considered decision and contrary to what it has been projected by the petitioners, it is not a decision taken in a hurry with any ulterior motives. Initially the Executive Committee of ONGC held its 459th meeting on 9.12.2014, which, inter alia, deliberated on the following issues:— “459.47.1-B-Retail Procurement for Medicines in Metros and Other big cities. Reputed Pharmacy chains should be empanelled through tendering process to provide medicine to ONGCs beneficiaries. For metros and cities where pharmacy chains are operating, the exercise will be undertaken centrally to maximize benefits to ONGC. Further three years periodicity will be followed. The basis would be discount offered on M.R.P. The beneficiaries will be issued indent slip by the ONGC doctor to collect medicine from any outlet of the empanelled pharmacy chain.
For metros and cities where pharmacy chains are operating, the exercise will be undertaken centrally to maximize benefits to ONGC. Further three years periodicity will be followed. The basis would be discount offered on M.R.P. The beneficiaries will be issued indent slip by the ONGC doctor to collect medicine from any outlet of the empanelled pharmacy chain. The methodology is suggested for all Metros, i.e., Delhi, Kolkata, Mumbai, Chennai, Ahmadabad & Hyderabad and other cities of ONGC work centres on uniform basis subject to availability of such chains.” 6. The Executive Committee in its 490th meeting, which was held on 17.12.2016, directed that medicine procurement guidelines with respect to empanelment of pharmacy be finalized and the Chief Medical Services to come up with necessary guidelines to maintain uniformity in procurement at different work centres. The relevant extract of the minutes of the Executive Committee meeting are as follows: “490/(252/2016)03 — EC Decision EC directed that Medicine procurement guidelines with respect to empanelment of pharmacy in metros be finalized by Director (H&), Director (Finance) and Director — I/c MM. 490/(252/2016).04— EC further directed that Chief Medical Services to come up with necessary guidelines to maintain uniformity in procurement at different work centres.” Thus, the initial decision to introduce “Retail Chain Pharmacy” only in the metros was revisited and it was now decided that the Chief Medical Officer should come up with guidelines to maintain uniformity in procurement at different work centres. 7. Thereafter, the Executive Committee in its 522nd meeting held on 21.2.2019 gave a further corrigendum on 13.5.2019, which issued direction that reputed pharmacy chain be empanelled across all work centres of ONGC to dispense medicines. The relevant extract from the corrigendum is as under : ‘522.46.04 EC further directed that reputed Pharmacy Chain be empanelled across all work centres to dispense medicines and the condition of Performance Bank Guarantee be waived off if the same is restricting the participation of vendor. EC also directed to present an update on experience of purchase of medicine through pharmacy brands in terms of beneficiary experience, savings, etc.” 8. Later, the Executive Committee in its 537th meeting held on 2.1.2020 and 03.1.2020 decided as under: “537.12.03— B — EC further directed that reputed Pharmacy Chain be empanelled across all work centres to dispense medicines and the condition of Performance Bank Guarantee be waived off if the same is restricting the participation of vendor.
Later, the Executive Committee in its 537th meeting held on 2.1.2020 and 03.1.2020 decided as under: “537.12.03— B — EC further directed that reputed Pharmacy Chain be empanelled across all work centres to dispense medicines and the condition of Performance Bank Guarantee be waived off if the same is restricting the participation of vendor. EC also directed to present an update on experience of purchase of medicine through pharmacy brands in terms of beneficiary experience, savings, etc.” Ultimately as we see the Executive Committee had decided to have this system on all work centres. 9. Mr. G.N. Sahewalla, learned senior counsel for the ONGC would, thus, argue that it is absolutely dear that the decision of ONGC to introduce “Retail Chain Pharmacy” system is a well thought out decision. This decision had been implemented and running successfully to the satisfaction of ONGC as well as its employees at places, such as Dehradun in Uttarakhand and Agartala in Tripura and Rajahmundry in Andhra Pradesh. The advantage of introducing a retail chain pharmacy system over the prevailing system is to ensure that the employees of ONGC get quality medicines with a price assurance with maximum discount and this also reduces administrative hassles of processing of bills from different sources. It was also said that there had been instances in the past of cheating and forgery of the bills by some of the vendors (not by the petitioners). The requirement of at least having twenty operational pharmacy outlets is to ensure that the bidder is equipped with adequate experience and expertise of handling a wide network. It was further stated that the regular Hospital in operation in Sivasagar has fifty-seven beds along with an Outdoor Patient Department (OPD) and the said Hospital handles about seven hundred cases daily. Moreover, the pharmacies operate not only in Sivasagar town but also operate their dispensaries at smaller places, like Nazira, Lakwa and Geleki. This will ensure uniformity of service quality in these locations to the employees of ONGC. The estimated tender value of Rs. 54,49,17,000 for the three years is based on the past trade and consumption of medicines and consumables and accordingly, the amount of earnest money deposit/performance bond was worked out.
This will ensure uniformity of service quality in these locations to the employees of ONGC. The estimated tender value of Rs. 54,49,17,000 for the three years is based on the past trade and consumption of medicines and consumables and accordingly, the amount of earnest money deposit/performance bond was worked out. The eligibility criteria prescribed in the tender were laid down so as to ensure that the best interest of ONGC are served and the retail chain pharmacy system, which the ONGC is now introducing in the present system, is working successfully at the other places. 10. The learned Single Judge, has, however, given a finding that the estimated annualize contract value in all the Centres comes up to only Rs. 91,50,000 and, hence, keeping the net worth value and turnover so high is wholly unnecessary. The estimated value of tender which was Rs. 54,49,17,000 was held to be incorrect. All the same, the above finding of the learned Single Judge is not based on any evidence or data which was before the learned Single Judge. Moreover, the learned Single Judge came to the conclusion that by keeping the petitioners out of the present tender system, their rights under articles 14, 19(1)(g) as well as article 21 have been violated. There has been no level playing field, which is an important concept within article 19(1)(g) of the Constitution of India. The learned Single Judge also came to the conclusion that the ONGC cannot take any policy decision without considering the local situation prevailing in Assam, where ONGC prior to its establishment had acquired land of the local people. ONGC, therefore, must consider the aspect of the local condition of Assam and Sivasagar in particular. The learned Single Judge, thus, gave a finding that this chain pharmacy system was originally taken as a policy decision of the ONGC to be introduced only in the work place in the metro and large cities and not for a place like Sivasagar, where if the policy is implemented then small chemists like the petitioners who are largely dependent on their business with ONGC will be completely wiped out. This was also held to be an invasion on the fundamental rights of the petitioners given to them under articles 14/19(1)(g)/21 of the Constitution of India. Accordingly, the writ petition was allowed and the tender notice dated 27.7.2020 was quashed. 11.
This was also held to be an invasion on the fundamental rights of the petitioners given to them under articles 14/19(1)(g)/21 of the Constitution of India. Accordingly, the writ petition was allowed and the tender notice dated 27.7.2020 was quashed. 11. Before this court, the learned senior counsel for the ONGC has apprised this court that when initially the petitioners had filed the writ petition, the learned Single Judge had granted an interim relief to the petitioners of WP(C) No. 3230/2020 by passing the following order on 24.8.2020 “It is submitted by the learned counsel that a similar writ petition bearing WP(C) No. 3079/2020 was preferred by another set of dealers and vide order dated 14.8.2020, the petitioners therein, were permitted to submit their bids and the respondent-Corporation was directed not to reject their bids on the ground of not meeting the eligibility criteria prescribed in Tender No. R16 GC20003 with a further direction to the ONGC not to finalize the present tender process. In view of the order dated 14.8.2020 and considering the grievances of the present petitioners similar to those petitioners in the earlier writ petition, as an interim measure the petitioners in this writ petition are permitted to submit their bids and the respondent-Corporation is directed not to reject their bids on the ground of not meeting the present eligibility criteria prescribed in Tender No. R16 GC20003. Mr. Choudhury further sought for extension of the time period for submission of the bids by the petitioners by another two days as today is the last date as extended by this court vide order dated 14.8.2020. Mr. Sahewalla, objected for such extension as it had already been notified in terms of the order dated 14.8.2020 passed by this court. Be that as it may, as this court vide order dated 14.8.2020 directed the respondent-Corporation not to finalize the tender process under such circumstances, extension by two days shall not cause prejudice to the respondents-ONGC. Considering the same, the petitioners are permitted to submit their bids within 26.8.2020 and not beyond that and the respondents-ONGC shall not finalize the tender process.” 12. On the strength of the said order, the petitioners were permitted to submit their bids. Thereafter, an interlocutory application being I.A. (Civil) No. 1805/2020 was filed by the ONGC for modification/vacation of the interim order dated 24.8.2020, which was disposed of vide order dated 1.12.2020.
On the strength of the said order, the petitioners were permitted to submit their bids. Thereafter, an interlocutory application being I.A. (Civil) No. 1805/2020 was filed by the ONGC for modification/vacation of the interim order dated 24.8.2020, which was disposed of vide order dated 1.12.2020. Relevant portion of the aforesaid order dated 1.12.2020, by which the interim order dated 24.8.2020 was modified, reads as under “Shri Sahewalla, the learned senior counsel by referring to the averments made in paragraphs 6, 7 and 8 has submitted that in terms of the aforesaid order, Order dated 24.8.2020, though bids have been submitted by the petitioners/opposite party, those were not accompanied by the Earnest Money Deposit and even the price bids have not been quoted. The learned senior counsel submits that such bids cannot be construed to be an “offer” within the meaning of law. It is further submitted that because of the third condition not to go ahead with the tender process, there would be delay which would cause grave hardships to the consumers and who are mainly the employees of the corporation. He accordingly prays for vacating the interim order as it has not served any useful purpose even to the writ petitioner/opposite party. On the other hand, Shri Choudhury, learned senior counsel for the opposite party/writ petitioners has submitted that the requirement of Earnest Money Deposit commensurate to the value of the work is wholly unreasonable and is not possible on the part of the petitioners to submit an EMD of such high value and in fact the said criterion is itself a subject-matter of challenge in the writ petition which was prima facie taken note of by this court while passing the interim order. Secondly, he submits that the price which is required to be quoted is to account for a discount within the range of 18% to 40% which is not possible on the part of the petitioner whose status cannot be compared with big multi-nationals for whom the entire NIT appears to be tailor-made. He further submits that since his empanelment is till April 2021, the entire matter can be thrashed out before that.
He further submits that since his empanelment is till April 2021, the entire matter can be thrashed out before that. It is also submitted that since the order in question is a inter parte order, the present grounds which have been cited were available to the Corporation which were not raised and, therefore, the applicant corporation is precluded from raising the said ground in an interlocutory stage. Replying to the aforesaid submission of Shri Choudhury, the learned senior counsel for the Corporation, Shri Sahewalia, learned senior counsel submits that an absolute embargo not to go ahead with the process would cause immense hardships and would not be in the interest of public. He further submits that even assuming for arguments sake that the petitioners bids need not be accompanied by the prescribed EMD which is a subject-matter of challenge, not quoting the price makes the bid a nullity in the eyes of law and that cannot be construed to be a valid offer in terms of the law of contract. The rival submissions advanced by the learned senior counsel have been duly considered. At this stage, Shri Choudhury the learned senior counsel submits that even assuming that the bid of the petitioner is held to be defective and not liable for consideration, if the tender process is finalised, the entire writ petition would become infructuous apart from the fact that local entrepreneurs would be totally ousted from their present business. After careful consideration of all the fact and circumstances, this court is of the opinion that not submitting the EMD may not be a condition for rejection of the bids of the petitioners outright inasmuch as EMD itself is a subject-matter of challenge. However, not quoting the price would be a relevant factor which would lead to construe the bid of the petitioner as not a valid offer. At the same time, the very purpose of filing the writ petition and at the primary challenge of introducing clauses which have been termed to be unreasonable are materials of examination. Therefore balancing the equities, the order dated 24.8.2020 is modified to be extent that while the applicant corporation would be at liberty to go ahead with the tender process, no final allotment be made without taking leave of this court.
Therefore balancing the equities, the order dated 24.8.2020 is modified to be extent that while the applicant corporation would be at liberty to go ahead with the tender process, no final allotment be made without taking leave of this court. The said observation is made with the understanding that the writ petition itself would be taken up for final disposal at the admission stage. The Interlocutory application is accordingly stands disposed of.” (emphasis supplied) 13. What the learned counsel for ONGC would like to emphasise is that it is clear that the petitioners could not effectively participate in the bid as they were not in a position to deposit the earnest money or to meet the demand of discount ranging between 18% to 14%. 14. The case of the petitioners before the learned Single Judge as well as before this court was that the conditions imposed by the ONGC, whereby a very restrictive eligibility conditions had been made will not only oust the present petitioners and such similarly placed persons but it is also a condition which is tailor-made for big corporate houses. With such a precondition no one in the entire North East will be eligible to participate in the bid. Secondly, these conditions have absolutely no nexus with the object sought to be achieved and, thirdly, in any case, the petitioners were carrying on their business with the ONGC for the past many years and there has never been any complaint of any malpractice or any other kind of complaint against any of the petitioners. 15. Oil & Natural Gas Corporation Ltd., i.e., ONGC, is a Government owned largest Crude Oil and Natural Gas Corporation of India. It has presence in various parts of the country and it is indeed true that many depend on ONGC for their livelihood. According to ONGC, the existing procedure of supply of medicines had several loopholes and weakness, such as the inability of the shops to provide medicines in time; delay in bulk procurement of medicines; substitution of low quality medicine brand without consulting the prescribing ONGC Doctors; logistic difficulty in obtaining the prescribed medicines; non-availability of 24×7 medicines and/or qualified pharmacists; malpractices/fraud committed by dealers in billing and/or documentation; and less discount offered over the MRP.
These were some of the reasons which required ONGC to remove the lacuna in the existing system and it was done after proper research and after consideration of available facts in order to serve the best interest of ONGC and its employees. It, therefore, decided to empanel reputed pharmacy across all work centres of ONGC. We have also seen that the decision to implement “Retail Chain Pharmacy” is not a decision taken in a hurry, rather it is a well thought out decision, keeping the best interests of the employees of ONGC in mind. Further, it is also incorrect to hold that this new system was limited to metropolitan cities. Though initially it was introduced in metros but the policy of ONGC was, as is clearly reflected from the decisions of its Executive Committees to spread it to all the work centres of ONGC. 16. Mr. M.K. Choudhury, learned senior counsel appearing for the respondents/petitioners has cited many judgments in his favour. These are — Union of India v. Dinesh Engineering Corporation, (2001) 8 SCC 491 ; Association of Registration Plates v. Union of India, (2005) 1 SCC 679 , Reliance Energy Ltd. v. Maharashtra State Road Development Corporation Ltd., (2007) 8 SCC 1 , Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 , Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216 and Chatradhar Das v. State of Assam, (2020) 1 Gau LT 645. 17. We are afraid that none of these rulings cited by Mr. Choudhury, learned senior counsel for the respondents actually help their case. In fact what has been laid down in all the decisions cited by the respondents is contrary to the proposition made by them before this court. The learned senior counsel for the respondents, however, has heavily relied upon one judgment of the hon'ble Apex Court in Reliance Energy Ltd. v. Maharashtra State Road Development Corporation Ltd., (2007) 8 SCC 1 . The aforesaid decision has also been relied upon by the learned Single Judge while allowing the writ petitions of the petitioners. Therefore, the aforesaid judgment needs to be discussed in some detail. 18. The facts of the above case are that the State of Maharashtra through Maharashtra State Road Development Corporation Ltd. (‘MSRDC’) had floated a global tender for completing Mumbai Trans-Harbour Link (‘MTHL’) between Mumbai and Navi Mumbai on a BOT basis.
Therefore, the aforesaid judgment needs to be discussed in some detail. 18. The facts of the above case are that the State of Maharashtra through Maharashtra State Road Development Corporation Ltd. (‘MSRDC’) had floated a global tender for completing Mumbai Trans-Harbour Link (‘MTHL’) between Mumbai and Navi Mumbai on a BOT basis. In the said bid, Reliance Energy Limited had joined hands with Hyundai Engineering & Construction Company Ltd. to form a consortium. This consortium did not qualify the pre-qualification bid on grounds that they did not meet certain pre-qualification criteria set up by the MSRDC. Aggrieved, had they filed a writ petition before the Bombay High Court, which was dismissed and subsequently they had approached the hon'ble Apex Court. The hon'ble Apex Court was of the view that there had been a mistake on the part of the MSRDC and its consultants in calculating the “cash flow reporting” of the consortium. This was stated in paragraphs 51, 52 and 53, which are reproduced below:— “51. In this case, as stated above, the only reason given by the consultants of MSRDC to exclude REL/HDEC was the negative impact on the future cash flows on account of the provisioning for doubtful debts in the accounts of HDEC for FY-2001. If future cash impact was the basis to exclude REL/HDEC, then the consultants for MSRDC should have considered cash flow reporting methods, which includes reconciliation method. There is no question of difference of opinion or different views as far as the application of cash flow reporting is concerned, which also falls in AS 3. There is nothing to show whether indirect method has at all been considered by CRISI, particularly when KPMG had invoked that method. There is no reason given for rejecting it. 52. Lastly, in the PQ document, the referral years were three years. The criteria was that there should be NCP of not less than Rs. 200 crores. However, the opinion of the consultants proceeds on the basis that if ‘add back’ is allowed it may have future cash impact.
There is no reason given for rejecting it. 52. Lastly, in the PQ document, the referral years were three years. The criteria was that there should be NCP of not less than Rs. 200 crores. However, the opinion of the consultants proceeds on the basis that if ‘add back’ is allowed it may have future cash impact. In the evaluation process, the consultants were entitled to take into account future cash impact but in order to do so they had to say why the indirect method of ‘cash flow reporting’ should not be accepted and if at all the impact of the provisioning was to be seen then there was no reason for not examining the audited accounts of 2004. There is a mix-up of two concepts here. The concept of non-compliance with financial criteria and the impact in future years on cash flow. As stated above, the very purpose of “cash flow reporting” is to find out the ability of HDEC to generate cash flow in future and if an important method of cash flow reporting is kept out, without any reason, then the decision to exclude REL/HDEC, is arbitrary, whimsical and unreasonable. In our view, for non-consideration of the reconciliation method, under cash flow reporting system, the impugned decision-making process stood vitiated. 53. In the result, we set aside the impugned judgment of the High Court; we hold that REL/HDEC (consortium) was erroneously excluded from the second stage of bidding process. Accordingly, we allow this civil appeal with no order as to costs.” It was under these context that the hon'ble Apex Court in paragraph 36 of its judgment, which was also relied upon by the learned Single Judge, has held as under “36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of ‘non-discrimination’. However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like article 21 of the Constitution. The said article 21 refers to ‘right to life’. It includes ‘opportunity’.
Article 14 of the Constitution embodies the principle of ‘non-discrimination’. However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like article 21 of the Constitution. The said article 21 refers to ‘right to life’. It includes ‘opportunity’. In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N., (2007) 2 SCC 1 , articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. ‘Level playing field’ is an important concept while construing article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When article 19(1)(g) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of ‘level playing field’. We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of level playing field’ is an important doctrine which is embodied in article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. ‘Globalisation’, in essence, is liberalisation of trade. Today India has dismantled licence raj. The economic reforms introduced after 1992 have brought in the concept of ‘globalisation’. Decisions or acts which result in unequal and discriminatory treatment, would violate the doctrine of ‘level playing field’ embodied in Article 19(1)(g). Time has come, therefore, to say that article 14 which refers to the principle of ‘equality’ should not be read as a stand alone item but it should be read in conjunction with article 21 which embodies several aspects of life. There is one more aspect which needs to be mentioned in the matter of implementation of the aforestated doctrine of ‘level playing field’. According to Lord Goldsmith, commitment to the ‘rule of law’ is the heart of parliamentary democracy. One of the important elements of the ‘rule of law’ is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of ‘reasonableness’, then such an act or decision would be unconstitutional.” 19.
One of the important elements of the ‘rule of law’ is legal certainty. Article 14 applies to government policies and if the policy or act of the Government, even in contractual matters, fails to satisfy the test of ‘reasonableness’, then such an act or decision would be unconstitutional.” 19. As we can see the doctrine of level playing field and violation of article 19(1)(g) have been mentioned by the hon'ble Apex Court in an entirely different context. What is significant thought is that even in the said judgment, two aspects are absolutely important. First and foremost, level playing field is a doctrine which is applicable to equally placed competitors and, secondly, in any case, level playing field has to give way when a larger public interest is involved. First and foremost in the present case, the doctrine of level playing field was not applicable as the petitioners admittedly are not equally placed to other qualified competitors who have met the requirement of a given turnover and other capacities. What is being done by ONGC is definitely for the larger public interest of its employees, who will now be getting better medicines at better rates under the present system. 20. Tata Cellular v. Union of India, (1994) 6 SCC 651 is the seminal decision, which sets out the limit of exercise of judicial review in matters of Government tenders and contracts. It was laid down that it is not for the court to determine whether a particular policy or a particular decision taken in the fulfilment of that policy is fair. The court is only concerned with the manner in which those decisions have been taken. The extent of the duty to act fairly will vary from case-to-case. The grounds on which judicial review can be entertained is that where there has been an irrationality, namely, Wednesbury unreasonableness and procedural impropriety. 21. Mr. G.N. Sahewalla, learned senior counsel for the appellants, on the other hand, has also relied upon a number of judgments, which are — Mohd. Fida Karim v. State of Bihar, (1992) 2 SCC 631 ; Tata Cellular v. Union of India, (1994) 6 SCC 651 ; Raunaq International Ltd. v. I.V.R. Construction Ltd., (1999) 1 SCC 492 ; Directorate of Education v. Educomp Datamatics Ltd., (2004) 4 SCC 19 ; Master Marine Services (P.) Ltd. v. Metcalfe & Hodgkinson (P.) Ltd., (2005) 6 SCC 138 ; Mr.
B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548 ; Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517 ; Shimnit Utsch India (P.) Ltd. v. West Bengal Transport Infrastructure Development Corporation Ltd., (2010) 6 SCC 303 ; Indian Railway Catering & Tourism Corporation Ltd. v. Indian Railway Major & Minor Caterers Association, (2011) 12 SCC 792 ; Union of India v. J.D. Suryavanshi, (2011) 13 SCC 167 ; Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216 ; Census Commissioner v. R. Krishnamurthy, (2015) 2 SCC 796 ; Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818 , and Jayanta Kumar Bhattacharjee v. Union of India, (2012) 5 Gau LR 91. 22. In Michigan Rubber (India) Ltd., the hon'ble Apex Court in paragraph 23 has laid down the following principles “(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. 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 the 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.” 23. All the aforesaid judgments point out that the scope of judicial review in contractual and in tender process is extremely limited. 24. Coming to the submission of Mr. M.K. Choudhury, learned senior counsel for the respondents who submits that the eligibility condition has ousted the petitioners and others and it is tailor-made to suit big corporate houses, it must be stated that the ONGC is the best judge to evaluate as to what is most suitable to its employees and if in its judgment they have come to the conclusion that the present process would suit them better, then the process cannot be faulted merely because the petitioners are now ineligible to meet the pre-conditions. On our consideration of all the relevant factors, we have absolutely no doubt in our mind that under the new scheme the interest and well being of the employees of ONGC was the prime considerations. The scheme and its conditions are in public interest and, therefore, even if the implementation of the scheme is contrary to the interest of a few chemists and pharmacists, it will not run contrary to the overall merit of the scheme. 25. The contention of the learned senior counsel appearing for the respondents that the decision of the ONGC is only to implement the scheme in metropolitan cities is also not correct.
25. The contention of the learned senior counsel appearing for the respondents that the decision of the ONGC is only to implement the scheme in metropolitan cities is also not correct. This court has been informed that the process is being carried out even in smaller towns like Rajahmundry in Andhra Pradesh and Agartala in Tripura, both of which have a much smaller population compared to Sivasagar which has a population of 11.5 lakhs. The contention of the learned senior counsel for the respondents that the eligibility conditions have absolutely no nexus with the object sought to be achieved is also not correct. There is definitely a purpose in bringing out the scheme, which is to get better quality medicines at cheaper rates 24× 7 to its employees. It has already been come in the interim orders of this court that it is an admitted case that the petitioners will not be able to supply medicines at the rates required by the ONGC. So, in any case, they are not qualified now to participate in the bid. We do not agree with the reasoning given by the learned Single Judge that the action of the ONGC violates the fundamental rights of the petitioners given to them under articles 14, 19(1)(g) and 21 of the Constitution of India. We are afraid that the findings of the learned Single Judge that the estimated annualize contract value in all the centres comes up to only Rs. 91,50,000 is a finding which is not reflected either form the record or the pleadings. In fact, the total value of all the running contracts which were awarded to total thirteen numbers of suppliers for different locations comes to Rs. 36 crores and it is on this basis that projections of Rs. 54 crores have been calculated for next three years. Similarly, there is nothing on record to show that the land of the petitioners was acquired by the ONGC. Consequendy, we allow these writ appeals and set aside the order of the learned Single Judge dated 2.3.2021 passed in WP(C) No. 3230/2020 and WP(Q No. 3079/2020. We must, however, note that since the ongoing contract in favour of the petitioners has been extended till 18.8.2021, that shall not be disturbed till 18.8.2021.