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GVK Emergency Management and Research Institute v/s The State of Maharashtra (through Principal Secretary Health & Family Welfare) & Others


Company & Directors' Information:- H S MANAGEMENT INSTITUTE PRIVATE LIMITED [Active] CIN = U74140DL2005PTC141500

Company & Directors' Information:- A S INSTITUTE OF MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U80302DL2005PTC140941

Company & Directors' Information:- J. P. HEALTH MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U85100DL2010PTC206595

Company & Directors' Information:- FAMILY MANAGEMENT RESEARCH INSTITUTE PRIVATE LIMITED [Strike Off] CIN = U73200DL1970PTC005245

    Writ Petition No. 420 of 2014

    Decided On, 12 August 2014

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE CHIEF JUSTICE MR. MOHIT S. SHAH & THE HONOURABLE MR. JUSTICE M.S. SONAK

    For the Petitioner: D.B. Shroff, Senior Advocate with Nishit Doshi, Abhishek Roy i/b Res Legal, Advocates. For the Respondents: R1 to R3, A.A. Kumbhakoni, Senior Advocate with Ashutosh M. Kulkarni, R4, P.K. Dhakephalkar, Senior Advocate with Amit Borkar, Advocates.



Judgment Text

Mohit S. Shah, CJ.

1. In this petition under Article 226 of the Constitution, the petitioner, one of the unsuccessful bidders, has challenged the decision of the respondent-authorities, i.e. State of Maharashtra, Director of Health Services and the State Health Society under the National Rural Health Mission to award the contract in favour of respondent no.4-BVG India Limited. The contract is for developing and operating Maharashtra Emergency Medical Services (MEMS) which inter alia includes provisions for 937 Ambulances.

2. On 2 August 2011, respondent-authorities had issued tender notice. Thereafter Tenders were submitted by four parties including the petitioner and respondent no.4. The technical bids of the petitioner and two other parties were held to be invalid. The petitioner and another party challenged the said decision by filing two writ petitions before this Court, which came to be dismissed by common judgment and order dated 11 May 2012. The prayer in the petitioner's Writ Petition (L) No.563 of 2012 was for a writ of mandamus to cancel the decision to accept the technical bid of respondent no.4 herein (i.e. the same party which was respondent no.4 in the said writ petition) and to declare the petitioner's technical bid as valid and to open the petitioner's financial bid and if found fit, to declare the petitioner as the successful bidder. The petitioner had also prayed for a writ of mandamus to direct respondent-authorities to cancel the work order in favour of respondent no.4 and to float a fresh tender for the work.

3. After hearing the learned counsel for parties at length, this Court dismissed the writ petition and declined to go into the technical aspect of the matter after giving following reasons:-

'It is not necessary for us to go into this aspect of the matter for two reasons. Firstly, these are highly technical aspects which ought to be left for the assessment/evaluation of the experts. Secondly, in view of the finding that the requisite certificates had not been furnished within the time stipulated in the tender conditions, it is not even necessary for us to go into the merits even if we were otherwise inclined or entitled to do so. Admittedly, some certificates were furnished after 26th December, 2011. This, was far too late. The respondents therefore admittedly did not consider them. It was strenuously argued that the petitioners have offered the very equipment that respondent no.4 has offered. We decline the invitation to go into a comparison of each of these components. Certification was an essential term of the tender. The non-compliance with the same must lead to a rejection of the tender'.

4. The said judgment was challenged before the Supreme Court and the Supreme Court dismissed Special Leave Petition (Civil) No. 19244 of 2012 by order dated 20 July 2012, which reads as under:-

'Heard learned counsel for the parties. No merit. Special Leave Petitions are dismissed.'

5. Thereafter the respondent-authorities issued a Letter of Intent dated 29 March 2013 in favour of respondent no.4. On 31 March 2013 an amount of Rs.80 crores was sanctioned and transferred in favour of respondent no.4 for initiating the project on the condition of submission of Bank Guarantee and on this Bank Guarantee being furnished the work order was issued on 9 May 2013. The Government also handed over government premises situated at Pune to respondent no.4 for putting up Emergency Response Centre as per the contract on 14 May 2013 and respondent no.4 submitted the models of Ambulances for verification Automotive Research Association of India (ARAI) submitted its report and the respondent no. 4 started providing ambulances manufactured by Force Motors with the necessary medical equipments like ventilators, oxygen cylinders etc. By now, respondent no. 4 has already supplied all the 937 ambulances. It is also the case of respondent no.4, which is not disputed, that respondent no.4 has already employed by 10 June 2014, 2409 Doctors and 1891 drivers and a large number of other administrative personnel for providing the Emergency Medical Services. It is to be noted that respondent no.4 has provided in all 937 ambulances as required under the contract, out of which 233 are Advanced Life Support Systems (ALS) ambulances and 704 are the Basic Life Support Systems (BLS) ambulances. ASL ambulance contains more advance life saving equipments like ventilator and cardiac assistance unit etc.

6. Respondent no. 4, consistent with the work order has already supplied 233 ALS ambulances of Force Motors. As regards BLS ambulances, respondent no.4 initially supplied 260 ambulances (out of 704 BLS ambulances required to be supplied) manufactured by Ashok Leyland. Thereafter, it appears that some issues arose with regard to the prototype of chassis and body of the ambulances manufactured by Ashok Leyland, in so far compliances with the Central Motor Vehicle Standards was concerned. Ashok Leyland indicated an extended time schedule for deliveries of the balance BLS ambulances. In such circumstances, respondent no.4 agreed to provide and has provided BLS ambulances manufactured by Force Motors. To date, out of the 444 balance BLS ambulances, 443 have already been delivered and 1 is under inspection. There is no dispute about the fact that Force Motors ambulances are much bigger and better than Ashok Leyland ambulances. Respondent nos. 1 to 3 do not have to bear any additional costs for the BLS ambulances manufactured by Force Motors. In such circumstances, it is the case of the respondents that the cause of public interest has in fact been advanced and not retarded.

7. It is necessary to note that in all there were four bidders and technical bids of three bidders including the petitioner were found to be invalid. Two of those non-responsive bidders including the present petitioner had challenged the decision holding their technical bids to be invalid and holding the technical bid of respondent no.4 to be valid in Writ Petition (L) No.462 of 2012 and Writ Petition (L) No.563 of 2012, which came to be dismissed by this Court by judgment dated 11 May 2012 as already indicated above and SLP against the said judgment came to be dismissed by the Supreme Court on 20 July 2012.

8. Thereafter the third party, whose technical bid was also found to be invalid, filed a complaint with the Comptroller and Auditor General of India (CAG) and the CAG carried out audit of the entire tender process in October 2012. As the CAG found no illegality or irregularity in the tender process the State Government rejected the complaint of the third party i.e. Ziquitza on 16 March 2013. Ultimately, after opening price bid of respondent no.4, the State Government approved on 28 March 2013 price bid of respondent no.4 and decided to issue work order to respondent no.4. Accordingly LoI was issued to respondent no.4 on 29 March 2013 as indicated above and respondent no.4 started supplying ALS & BLS ambulances manufactured with necessary medical equipments and by now has supplied all 943 ambulances and has also appointed 2409 Doctors and 1891 drivers as indicated above.

9. The gravamen of challenge in the present writ petition is that once respondent no.4 had offered to provide BLS ambulances to be manufactured by Ashok Leyland, it was not open to respondent no.4 to change the model from Ashok Leyland to Force Motors and that respondent-authorities erred in permitting respondent no.4 to make such a change. It is submitted that before permitting respondent no.4 to make such a change, respondent-authorities ought to have given an opportunity to other bidders such as the petitioner and on account of failure on part of the respondent-authorities in not giving such an opportunity to the petitioner and other bidders, the impugned decision is illegal and arbitrary.

Mr. D.B. Shroff, learned senior counsel for the petitioner has vehemently submitted that when respondent no.4 had initially offered to supply BLS ambulances to be manufactured by Ashok Layland, it was not open to the respondent-authorities to permit respondent no.4 to supply a part of the BLS ambulances, manufactured by Force Motors.

10. In the affidavit-in-reply filed by Dr. S.D. Pawar, Director of Health Services on behalf of the respondent-authorities, it is stated that respondent no.4 had already proposed to provide ALS ambulances of Force Motors as per its bidding and it was only for BLS ambulances that respondent no.4 had proposed to provide vehicles of Ashok Leyland. Force Motor vehicles are admittedly much better in size and quality. In fact on the ground that respondent no.4 would be providing vehicles of Force Motors, which are bigger and better for ALS as well as BLS ambulances, respondent no.4 had also requested for 10% increase in the price by way of capital expenditure. Though in the affidavit in reply on behalf of the respondent-authorities, it is stated that the Government had not yet taken any decision in this regard, at the hearing Mr. Kumbhakoni, learned Senior counsel for the State Government has made a statement, on instructions, that the Government has decided not to accept the said request and, therefore, there is no additional capital cost to the public exchequer on account of provision of Force Motor vehicles for BLS ambulances as well. There is no dispute about the fact that Force Motor vehicles are much bigger and better for providing ambulance services than Ashok Leyland vehicles, which respondent no.4 had earlier offered.

11. In view of the aforesaid categorical stand of the State Government that the Government is not going to pay any extra price to respondent no.4 for providing Force Motor vehicles for BLS ambulances as well, we do not find any illegality or arbitrariness in the impugned decision.

12. One more contention raised by the petitioner is that instead of installing MEBER Ambulance Cot as provided in its bid, respondent no.4 is now providing FERNO Ambulance Cot and, therefore, there is deviation from the tender condition.

13. As regards the above submission, it is the case of the respondent-authorities that the proposal of respondent no.4 to install FERNO Ambulance Cot was submitted for consideration and verification to the Technical Evaluation Committee. The said committee after its due verification and examination recommended that FERNO Ambulance Cot is much better in quality and utility than MEBER because the MEBER Ambulance Cot when loaded on the loading platform would obstruct the rear door until the wheels were manually folded inside. This process was found to be functionally inappropriate. So also the MEBER Ambulance Cot was found to be heavy to load and there was perceptible pressure on the spine of the loader even while loading an empty cot. The net weight of MEBER Cot is 68 kg, while the net weight of FERNO Cot is 46 kg. Therefore, the Committee called upon respondent no.4 to change the said Ambulance Cot. Under such circumstances, the FERNO Ambulance Cot is duly sanctioned to obviate the practical difficulties faced with the operation/handling of the earlier choice of the respondents. This adjustment can by no stretch of imagination be termed as a major deviation as is tried to be projected by the petitioner. Without any additional burden upon the public exchequer, if respondent no.4 was called upon and has supplied an enhanced product to meet with the exigencies of the situation, then it cannot be said that the public interest has, in any manner, been compromised. Such adjustment, which is basically, in the nature of some free play in the joints has to be allowed to the executive authorities and there is no question of any arbitrariness involved.

14. In ground (v) of the petition, the petitioner has raised the following contention on the price issue:

'For that the financial bid of the respondent No.4 is substantially higher than the financial bid of the other bidders and therefore the grant of the present tender in favour of respondent no.4 has an adverse impact on the State Exchequer. The petitioner states and submits that respondents Nos. 1 to 3 have accepted the Opex Bid of Rs.1,40,000/- per month per ambulance of the respondent no.4, which is significantly higher than the Opex rate quoted by the petitioner. It is submitted that the petitioner is providing medical emergency response services at a much lesser rate in the States of U.P., Rajasthan and Kerala at Opex rates of Rs.1,17,000/-, Rs.1,12,500/- and Rs.1,17,000/- per month per ambulance respectively. It is submitted that the total Opex rate for the entire project period i.e. for five years as quoted by respondent no.4 is Rs.801.14 crores, whereas the total Opex rate for the entire project period as quoted by the petitioner is Rs.663.51 crores. This is in addition to the higher Opex rate quoted by respondent No.4 for capital items like ambulance vehicles, medical equipments etc. as compared to the other bidders of the present tender. Hence the respondent-State being the guardian of the public funds ought to have considered the reasonable rates quoted by the other bidders, which would have been in the interest of the public and finances of the State.'

15. While it is true that according to the petitioner, rates quoted for operational expenses by the petitioner in its bid may be lower than the operational expenses quoted by respondent no.4, it needs to be noted that once the petitioner's technical bid is found to be non-responsive or invalid and challenge to the decision of the respondent-authorities treating the petitioner's technical bid as non-responsive/invalid has been turned down by this Court and that decision has not been disturbed by the Supreme Court, it is not open to the petitioner now to challenge the decision in favour of respondent no.4 on the ground that rates quoted by the petitioner were lower than the rates for which the contract is awarded to respondent no.4.

16. The submission of the respondent-authorities is that when the tender notice was initially issued on 2 August 2011, the contract was to be given for five year period 2011-2015, but in view of the litigation by two non-successful bidders and complaint by the third non-successful bidder before CAG, there was delay in the entire process and work order was ultimately issued to respondent no.4 on 9 May 2013. Hence, the contract has been awarded to respondent no.4 for the period 2014-2019 and therefore operational expenses for the period 2014-2019 are bound to be higher than the operational expenses estimated for the period 2011-15. However, even in determination of the operational expenses for the year 2016 to 2019, the percentage increase for the year 2011-2015 has been treated as the basis. Accordingly, there is considerable substance in the submission of respondent-authorities that there is neither any deviation in the terms of the tender nor any arbitrariness involved in the process.

17. In the additional affidavit filed by and on behalf of respondent no. 4 on 18 June 2014, it is stated as follows:

'The OPEX cost is relatable to each ambulance that has been put into service / use. I say that in terms of the tender / contract in issue deployment of the ambulances was spread over a period of THREE calendar years i.e. phase-wise. In all 937 ambulances were to be supplied over a period of three years i.e. from April, 2011 to March, 2014 i.e. 374 (93 ALS and 281 BLS) ambulances in the first year, 373 (93 ALS and 280 BLS) ambulances in the second year and balance 190 (47 ALS and 143 BLS) ambulances in the third year.

However, the implementation of the project was delayed due to objections and litigations raised by successful bidders. Resultantly, the Respondent no. 4 was required to undertake the deployment of all ambulances just within a period of five months i.e. from February, 2014 to June, 2014. Obviously, on account of more number of ambulances being made available than what was originally contemplated the total figure of OPEX has gone up albeit in the same proportion of per month and per ambulance. Consequently, the OPEX cost has changed proportionately because of immediate deployment of all the ambulances. Moreover, the escalation has been awarded strictly in terms of the agreed proportion of the reimbursement costs.'

18. Mr. D.B. Shroff, learned senior counsel for the petitioner placed reliance upon the decisions of the Supreme Court in the cases of Harminder Singh Arora vs. Union of India & ors. (1986) 3 SCC 247 and Monarch Infrastructure (P) Ltd vs. Commissioner, Ulhasnagar Municipal Corporation and ors. (2000) 5 SCC 287, to contend that the State must abide by the terms of the tender and in case any deviation is proposed, the State must invite fresh tenders.

19. In the case of Harminder Singh Arora (supra), the Supreme Court was concerned with the acceptance of the tender of a tenderer, who did not comply with the conditions of the tender notice. In the present case, from the material on record we find that respondent no.4 was found to be eligible and consequently the bid submitted by respondent no.4 was held to be responsive. This is not a case where any essential tender condition has been relaxed in favour of respondent no.4. As such, the ratio of the decision in the case of Harminder Singh Arora (supra) is inapplicable.

20. In the case of Monarch Infrastructure (P) Ltd (supra), one of the conditions for eligibility came to be deleted after the expiry of time limit for submission of tenders, but before the opening thereof. In such circumstances, the Supreme Court ruled that the award of contract to a tenderer who at the time of submission of tender did not satisfy the said condition, was liable to be set aside. In the facts and circumstances of the present case, there has been no deletion of any eligibility conditions. Accordingly, the decision in the case of Monarch Infrastructure (P) Ltd. (supra) is also distinguishable.

21. In matters of this nature, the Court is concerned with reviewing not the merits of the decision, but the decision making process itself. The test to be adopted by the Court is to consider whether something has gone wrong of a nature and degree, which requires its intervention. The modern trend points to judicial restraint, particularly as this Court does not sit as a Court of appeal or substitute its own decision for the decision taken by the authorities. A certain measure of freedom of play in joints to the executive is required to be allowed. In the present case, we are satisfied that there has been no devi

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ation from the essential eligibility conditions as stated in the tender notice. By permitting respondent no.4 to supply the Force Motors BLS ambulances, which are admittedly of bigger size and better quality at no extra cost to the State, public interest has not been sacrificed. In fact, being bigger, Force Motor Ambulances can, in future be upgraded from Basic Level to Advanced Level, which would not be possible in case of Ashok Leyland Amulances. As noted earlier, unlike the petitioner's earlier writ petition (L) no. 563 of 2012, this is not a petition between two rival bidders. Incidentally, the earlier writ petition, by which the present petitioner had questioned its own disqualification and acceptance of the technical bid of respondent no. 4 was dismissed by this Court and such dismissal was upheld by the Supreme Court. By the present petition, the petitioner purports to espouse the cause of public interest. Therefore, the focus of this Court is to see whether public interest has been compromised in any manner. Even otherwise, when a writ petition is filed challenging the award of contract by a public authority, this Court is required to satisfy itself that there is an element of public interest involved in entertaining such a petition. This petition cannot be viewed as a mere dispute between two rival bidders. Therefore, unless the Court is satisfied that public interest has been compromised, or the transaction is entered into mala fide, the extra ordinary jurisdiction under Article 226 of the Constitution of India is not to be exercised. In this regard, it is important to note that by now all 937 ambulances have been provided by respondent no. 4 at the bid price itself. Besides making them operational, services of doctors, paramedics and drivers have already been made available by respondent no.4. Accordingly, no public interest would be served by interfering the award of contract in favour of respondent no.4. 22. In view of the above discussion, we do not find any merit in this petition. The petition is, therefore, summarily dismissed.
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