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2024 DIGILAW 1480 (AP)

Nestor Pharmaceuticals Limited v. State of Andhra Pradesh

2024-10-18

K.MANMADHA RAO

body2024
ORDER : 1. This Writ Petition is filed under Article 226 of the Constitution of India: “to issue a Writ or Order or Direction more particularly one in the nature of Writ of Mandamus: (i) declaring the action of the 2nd Respondent (vide email dated 07.02.2024) in cancelling the PO dated 13.12.2022 bearing PO Ref No. 2168.02/2022-Q3/212/2313 and PO dated 07.06. 2023 bearing PO Ref No 2168.03/2023 to the conditions of tender in Tender Document No. 123-8/APMSIDC/MEDICINE WlNG/2022-23 and consequently set aside the same: (ii) declaring the action of the 2nd Respondent in issuing POs dated 06.02.2024 bearing PO Ref Nos. 2168.02/2023-Q4/212/425(10282400786) and Nos. 2168. 03/2023-Q4/212/426 (10282400787) to the 3rd Respondent at an additional cost of Rs.2,66,80,953/- as illegal, arbitrary, discriminatory and contrary to the conditions of the tender in Tender Document No. 123-8/APMSIDC/MEDlCINE WING/2022-23 and consequently set aside the POs dated 06.02.2024 bearing PO Ref Nos. 2168. 02/2023-Q4/212/425 (10282400786) and Nos. 2168.03/2023-Q4/212/426 (10282400787) issued to the 3rd Respondent. (iii) direct the 2nd Respondent to revive the POs dated 13.12.2022 bearing PO Ref No. 2168.02/2022-Q3/212/2313 and PO dated 07.06.2023 bearing PO Ref No 2168. 03/2023-Q1/212/642 issued to the Petitioner and pass such other and further orders.” 2. Heard Mr. S. Vivekchandrasekhar, learned counsel for the petitioner and learned Advocate General for the 1st respondent; Mr. Ch. Venkata Reddy, learned counsel for the 2nd respondent and Anup Koushik Karavadi, learned counsel for the 3rd respondent. 3. It is the case of the petitioner is that the petitioner is a company after obtaining necessary license from the licensing authorities engaged in the business of manufacturing drugs. The 2nd respondent called for tenders vide Tender Document No. 123-8/APMSIDC/ MEDICINE WING/2022-23, for the supply of medicines to the 2nd respondent. The petitioner being the eligible to participate in the bid process as contemplated under Clause 2 of the bid document submitted its technical bid and price bid and was thereafter determined as L1 by virtue of quoting the lowest evaluated price. The 3rd respondent was declared as L2. The petitioner being the eligible to participate in the bid process as contemplated under Clause 2 of the bid document submitted its technical bid and price bid and was thereafter determined as L1 by virtue of quoting the lowest evaluated price. The 3rd respondent was declared as L2. As per tender document, once a tenderer is declared as L1, Pos will be issued to the tenderer under acknowledgement with certain terms and conditions and as the petitioner declared as L1, the petitioner and the 2nd respondent entered into an Agreement dated 02.11.2022 and thereafter the 2nd respondent has been issuing Pos on the petitioner from time to time and pursuant to the Pos, the petitioner has been supplying drugs to the 2nd respondent. While the matter stood thus, against the Pos issued by the 2nd respondent, has been diligently making the supplies as provided under the terms and conditions of the tender document and also the agreement, the 2nd respondent repeatedly delayed the payments due to the petitioner for supplies so made by the petitioner. As on date, in relation to the present tender, the petitioner has supplied drugs worth Rs. 7,89,78,577/- to the 2nd respondent and the 2nd respondent has released amounts only to a tune of Rs. 2,42,78,462/- to the petitioner against the supply of the drugs. In spite of repeated requests, the 2nd respondent has not released the remaining due payments of Rs. 16,79,62,278/-. Due to which the petitioner was financially constrained to carry out its business. In the meantime, the petitioner was surprised to receive an e-mail communication from the 2nd respondent dated 07.02.2024, wherein the 2nd respondent has sought to cancel the 2 POs issued by the 2nd respondent to the petitioner and the petitioner has made reply through e-mail on 08.02.2024. While the petitioner was anticipating a response from the 2nd respondent to its e-mail dated 08.02.2024, the petitioner was surprised to know on 04.03.2024 that the 2nd respondent, prior to cancelling the POs of the petitioner vide e-mail dated 07.02.2024, had already issued fresh POs against the same quantities to the 3rd respondent vide Purchase Orders dated 06.02.2024, which is highly illegal and arbitrary and contrary to the conditions of the tender document. Hence, inaction of the respondents in issuing impugned orders by the respondents is questioned in this writ petition and requested to set aside the same, while reviving the POs dated 13.12.2022 issued to the petitioner. 4. Per contra, the 2nd respondent filed counter-affidavit, denying all material allegations made in the writ affidavit and mainly contended that as per Clause No. 16 of the Tender Notification deals with the ‘Payment Provisions’. Clause No. 18 of the Tender Notification deals with ‘Liquidated Damages and other Penalties’ as per the per the said Clause No. 18 beyond 120 days, the Purchase Order will be cancelled, and stocks will not be accepted and PSD will be forfeited, if it is further pertinent to note that the alternative procurement will be done from the other bidders matching with L-1 price or at their quoted price or from other open sources procurement and difference in difference in procurement will be charged from L-1 supplier. As per Clause 9.1(ii) of the Tender Notification dated 25.08.2022 in case order is placed only on L1 bidder and if they failed to supply the drugs within stipulated time or due to quality failure, the purchaser order shall be issued to L2 bidder. The petitioner did not submit the delivery schedule within 7 days and did not initiate delivery even after stipulated time i.e. after 75 days inspite of telephonic and mail communication dated 20.10.2023 from APMSIDC. In view of non supply of the tablets by the petitioner School Children and Pregnant Women, Anaemic Woman and Lactating Mothers have suffered a lot and causing much inconvenience to the State. It is further contended that the petitioner was also debarred by the Gujarat Medical Service Corporation Limited, State of Gujarat vide proceedings dated 03.07.2024 for a period of 3 years from business for supplying sub-standard drugs and the supply in question in the present writ petition is also one and the same, so also Kerala Medical Service Corporation Limited debarred the petitioner from participating the tender for supply of the said drugs. Therefore, requested to dismiss the same. 5. Therefore, requested to dismiss the same. 5. The 3rd respondent filed counter-affidavit, denying all material averments made in the writ affidavit and mainly contended that the 2nd respondent offered to supply the 2nd Lot of quantities within 150 days from the date of confirmation and issued an e-mail dated 07.02.2024 to the petitioner cancelling the Purchase Order dated 13.12.2022 and 07.06.2023 due to the delay in supplying of the drugs. Thereafter the 2nd respondent issued Purchaser Order dated 06.03.2024 in favour of the 3rd respondent being the L2 bidder of the Tender Notification dated 25.08.2022 and the supplies were required to be made as per delivery schedules. The 2nd respondent being a diligent supplier had started to make the supplies of the quantities in relation to the Purchase Orders received immediately upon their receipt. As on 24.04.2024, the 2nd respondent had made supplies of the stocks about worth of Rs. 3,00,00,000/- to the respective Centres as per the instructions of the Corporation. This respondent is not aware of this writ petition till 24.04.2024. Upon getting to know about the order of this Court, the 3rd respondent stopped in supplying the drugs. Therefore, requested to dismiss the writ petition. 6. Perused the record. 7. During hearing learned counsel for the petitioner placed on record the decision High Court of Delhi in Jakson Engineers Pvt. Ltd. v. Delhi Development Authority and Others, ÏLR (2003) II Delhi 264 wherein learned Single Judge held as follows: “37. The first aspect to be considered arises from the rights and obligations of the parties. There is no doubt that the petitioner was obliged to deposit the balance 75% of the amount within the time stipulated. There was, however, also a corresponding obligation on DDA to handover possession of the plot thereafter. This is apparent from clause 5 of the terms and conditions of auction. It is also not disputed that the plot in question was encroached upon and DDA had taken no steps to remove the encroachments prior to the auction or even till the stage where the letter for balance amount was sent to the petitioner. The petitioner subsequently informed DDA on 10.10.1985 about the same. In fact, in the affidavit dated 27.11.2001, it has been stated that the auction purchaser was informed by DDA about encroachments on the said date. The petitioner subsequently informed DDA on 10.10.1985 about the same. In fact, in the affidavit dated 27.11.2001, it has been stated that the auction purchaser was informed by DDA about encroachments on the said date. This would show that DDA was not in a position to perform its corresponding obligation to hand over possession of the plot in question.” ............ 42. The first information to Section 51 of the said Act itself would show that where delivery on payment was not possible, there would be no obligation to pay for the same. This is the position in the present case.” 8. Learned counsel for the petitioner vehemently argued that since the 2nd respondent though received the drugs supplied by the petitioner, the 2nd respondent fell due to a tune of Rs. 16,79,62,278/- to the petitioner, therefore, the petitioner is under financial crisis and the business is being crippled due to non payment of the dues by the 2nd respondent. Therefore, the drugs could not be supplied within stipulated time. As per Clause 16.2 of the tender document, the payments towards supplies will be made after completion of the supplies against the PO and within 60-90 days of submitting all the required documents as per the terms and conditions of the P.O. Clause 16.4 provides that payment will be made after completion of 95% of the supplies. Further, as per Clause 12.5 of the tender document, in the event of the tenderer being unable to supply the drugs within stipulated delivery period of the PO, the tenderer must take necessary approval from the 2nd respondent for supply of drugs beyond the stipulated period. The 2nd respondent violating the tender conditions and given option to the 3rd respondent to supply the drugs without clearing the dues to the petitioner, which is highly illegal and arbitrary. 9. Learned counsel for the 3rd respondent relied on a decision of the Hon’ble Apex Court in Tata Motors Limited v. The Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Others, 2023 Live Law (SC) 467 wherein the full bench of Hon’ble Supreme Court held as follows: “49. It is not in dispute that the first and foremost requirement of the Tender was the prescribed operating range of the single decker buses which would operate for around and average of 200 Kms in a single charge in actual conditions’ with 80% SoC without any interruption. It is not in dispute that the first and foremost requirement of the Tender was the prescribed operating range of the single decker buses which would operate for around and average of 200 Kms in a single charge in actual conditions’ with 80% SoC without any interruption. Then materials on record would indicate that the TATA Motors in its bid deviated from this requirement and had informed BEST that it could carry the operating range in the “standard test conditions’ which was not in accordance with the Tender conditions. The High Court has rightly observed in its impugned judgment that the bid of the TATA Motors failed to comply with the said clause. TATA Motors deviated from the material and the essential term of the Tender. It may not be out of place to state at this stage that it is only TATA Motors who deviated from the condition referred to above. However, we are of the view that the High Court having once declared TATA Motors as ‘non-responsive’ and having stood disqualified from the Tender process should not have entered into the fray of investigation into the decision of BEST to declare EVEY as the eligible bidder. We are saying so because the High Court was not exercising its writ jurisdiction in public interest. The High Court looked into a petition filed by a party trying to assert its own rights. As held by this Court in Raunaq International Ltd (supra) that grant of judicial relief at the instance of a party which does not fulfil the requisite criteria is something which could be termed as misplaced.......” 50. We take notice of the fact that Annexure Y was originally required to be submitted by the “Successful Bidder” after the evaluation of the bid and the same did not figure in the list of documents and annexure to be included in the technical submissions, as provided under Clause 5.1.1 of Schedule II of the Tender. We take notice of the fact that Annexure Y was originally required to be submitted by the “Successful Bidder” after the evaluation of the bid and the same did not figure in the list of documents and annexure to be included in the technical submissions, as provided under Clause 5.1.1 of Schedule II of the Tender. Further the format provided for Annexure Y in the Tender documents in its heading states that the ‘Successful Bidders shall upload a Letter of Undertaking on their letter head as below.” Therefore, we are of the view that the restriction on revision of documents under Clause 16 of Schedule I, which states, “No addition/correction, submission of documents will be allowed after opening of technical bid” is only limited to the documents necessary to be included in the technical bid and would not be applicable to any such document which does not form a part of the technical bid.” 10. Therefore, learned counsel for the 3rd respondent vehemently argued that in view of non supply of drugs by the petitioner as per POs, the 2nd respondent given PO to supply the drug for the rate quoted by the petitioner as per procedure. Therefore, the 3rd respondent has supplied the drugs. The citation cited supra is squarely applies to the facts of this case and requested to dismiss the writ petition. 11. Further, the respondents relied on a decision of the Hon’ble Supreme Court in Jagdish Mandal v. State of Orissa and Others, (2007) 14 SCC 517 wherein the Hon’ble Division Bench held at Para 22 that “the power of judicial review will not be permitted to be invoked to protect private interest at the cost of the public interest, or to decide contractual disputes.” Therefore, the petitioner has no authority to get any relief by invoking procedure under Article 226 of the Constitution. Hence, requested to dismiss the writ petition. 12. Upon perusal of the entire material available on record would show that there is a contract between petitioner and 2nd respondent for supply of drugs by way of an Agreement as per Tender Notification, which is undisputed. The petitioner has given explanation that the 2nd respondent fell due to a tune of Rs. 12. Upon perusal of the entire material available on record would show that there is a contract between petitioner and 2nd respondent for supply of drugs by way of an Agreement as per Tender Notification, which is undisputed. The petitioner has given explanation that the 2nd respondent fell due to a tune of Rs. 16,79,62,278/- to the petitioner for supply of the drugs as per POs, the petitioner company incurred huge financial crisis and the same was informed to the 2nd respondent, but the 2nd respondent instead of clearing the same, has given option to the 3rd respondent to supply the drugs by cancelling the POs issued to the petitioner, which is illegal as contended by the petitioner. Further, the 2nd respondent in its counter affidavit stated that the Gujarat Medical Service Corporation Limited debarred the petitioner for a period of 3 years from business for supplying sub-standard drugs and the supply in question in the present writ petition. 13. As per Tender for supply of Medicines for Program to the respondents corporation would show in general conditions at 3(i) it is clear that during tender or price agreement period, if L1 bidder is debarred/deregistered/blacklisted/banned by any Central Government or State Government or its procurement agencies due to quality failure or other reasons, APMSIDC may purchase the drugs from L2 bidder who shall match the price of L1 of may go for fresh tender as per discretion of APMSIDC. Further Clause 16.2 of payment provisions in tender conditions that “payments towards the supply of surgical consumables will be made after completion of supplies against the PO, within 60 to 90 days after submission of all required documents as per the terms and conditions of PO for bill processing. The payment will be made through A.P Government Finance portal CFMS/RTGS (Real Time Gross Settlement System)/Core Banking/NEFT.” The Tender shall furnish the relevant details in original (Mandate Form) to make the payment through CFMS/RTGS/Core Banking/NEFT. Further as per Clause 16.4 (i) “Payment will be paid after completion of 95% of supplies. The payment will be made through A.P Government Finance portal CFMS/RTGS (Real Time Gross Settlement System)/Core Banking/NEFT.” The Tender shall furnish the relevant details in original (Mandate Form) to make the payment through CFMS/RTGS/Core Banking/NEFT. Further as per Clause 16.4 (i) “Payment will be paid after completion of 95% of supplies. In case any purchase order is executed partially beyond 75% up to 95% remaining bills will be processed at the discretion of APMSIDC by imposing a penalty of 10% on unexecuted quantity value only.” Whereas, learned counsel for the 3rd respondent vehemently argued that the supply period without penalties as per Clause 18.1 of the tender conditions that up to 75 days from the date of issue of PO, supplies shall be started by 45th day from the date of issue of P.O. Beyond 120 days PO will be cancelled and stocks will not be accepted. PSD will be forfeited. Alternate Procurement will be done from the other bidders matching with L1 price or at their quoted price or from the other open sources procurement and difference in procurement will be charged to the L1 supplier. Therefore, the 3rd respondent supplied the drugs as per said condition and that they never violated any conditions as contended by the 3rd respondent. 14. Therefore, in view of the aforementioned circumstances, the issue involved in this writ petition required to be decided by way of trial by adducing evidence for examination before the competent civil court having original jurisdiction. In view of limited scope, this Court cannot be looked into the aspects why the petitioner has not supplied the drug within time or why the 2nd respondent not made payment properly and why the 3rd respondent supplied drugs in the place of petitioner. 15. The subject issue is purely civil in nature and contractual obligation and that therefore, the petitioner cannot invoke the procedure under Article 226 of Constitution of India to redress its grievance in this Writ Petition as per Jagdish Mandal’s case (supra). Under these circumstances, it is not a fit case to issue any direction in favour of the petitioner to set aside the impugned orders issued by the 2nd respondent, as mixed question of law and mixed question of fact involved in this matter. 16. Accordingly, this Writ Petition is dismissed. It is left open for the parties to approach competent fora for redressal of their grievance. 16. Accordingly, this Writ Petition is dismissed. It is left open for the parties to approach competent fora for redressal of their grievance. Interim order granted by this Court shall stands vacated. There shall be no order as to costs. As a sequel, miscellaneous applications pending, if any, shall also stand closed.