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M/s. Advanced Biotech Products (P) Ltd., Represented by its Director S. Thirunavukarasu v/s The Managing Director, Tamil Nadu Medical Services Corporation Ltd., Egmore & Another

    W.P. Nos. 155, 934 of 2010, 17453 of 2012 & Connected Miscellaneous Petitions
    Decided On, 13 February 2013
    At, High Court of Judicature at Madras
    By, THE HONOURABLE MR. JUSTICE K. CHANDRU
    For the Petitioner: M. Gnanasekar, Advocate. For the Respondents: R1, Shivakumar, R2, V.T. Narendiran, Advocates.


Judgment Text
(Prayer: W.P.No.155 of 2010 filed under Article 226 of the Constitution of India praying for a Writ of Certiorarified mandamus, calling for the records of the respondent relating to the impugned rejection order dated 22.7.09 Ref.11484/M(P)/TN SMC/2009 with regard to the Tender No.003/M(P)/TENDER/SUR &SUT/TNMSC/2008 dated 26.3.08 for the supply of Surgicals and Sutures for the year 2008-2010 in respect of Annexure VI, Sl.No.35, Item code No.R070 for the supply of Collagen Sheets 10 X 10 cm quash the same and direct the respondent to permit the petitioner company to take part in the Price Bid of Cover B.

W.P.No.934 of 2010 filed under Article 226 of the Constitution of India praying for a Writ of mandamus, forbearing the respondent and its officers from considering the Technical Bid - Cover (A) of any other tenderers without considering the Technical Bid - Cover (A) of the petitioner herein as valid and qualified bid in respect of the supply of surgical and suture items to the respondent corporation for the year 2010-2012 notified in the tender notification No.002/M(P)/TENDER/ SUR&SUT/TNMSC/2009 dated 26.12.2009.

W.P.No.17453 of 2012 filed under Article 226 of the Constitution of India praying for a Writ of certiorarified mandamus, calling for the records of the first respondent to the impugned Rejection order dated 14.6.2012 with regard to the Tender Ref.No.002/M(P)/ TNMSC/SUR&SUT/2012 dated 6.2.2012 for the supply of Surgicals and Sutures for the year 2012-2014 in respect of Item Code No.R070 for the supply of Collagen Sheets 10 x 10 cm and Code No.R150 for the supply of Collagen Sheets 30 cm x 30 cm and to quash the same and direct the first respondent to permit the petitioner company to take part in the Price Bid of Cover B.)

Common Order:

1. The three writ petitions were filed by the same company. In all these three writ petitions, the petitioner company questions the rejection of their tender bid submitted to the respondent viz., Tamil Nadu Medical Services Corporation Ltd.

2. The first writ petition W.P.No.155 of 2010 relates to the submission of tender in respect of the tender notification issued by the respondent Corporation for the year 2008-2010. The petitioner's offer was rejected by the Corporation on the ground that the material supplied by them are not up to the standard. Hence, the petitioner company filed a writ petition, being W.P.No.7310 of 2009, seeking for a direction to the respondent Corporation to furnish the reason for rejection. It was pursuant to the direction issued by this Court, the impugned order dated 22.07.2009 was passed by the respondent. The reason for rejection was that the sample of the petitioner company was sent for clinical evaluation by the specialists and they were not accepted. Challenging the same, the writ petition came to be filed.

3. When that writ petition viz., W.P.No.155 of 2010, came up on 07.01.2010, notice regarding admission was ordered. Pursuant to the notice, the respondent Corporation has filed a detailed counter affidavit dated 30.03.2010. In paragraphs 13 and 17 of the counter affidavit, it was averred as follows:-

"13. ...For all the products the respondent had adopted clinical evaluation testing. In the said test, the medical experts had says that it was not accepted since it is not sticking to the WO surface and take a long time to dry. It is also mentioned that the sheets were not accepted because it was too small dressing retard. It is submitted that there is a substantial tenderer while testing is done by the independent authority, the name of the manufacturer is not disclosed and where it is disclosed.

17. ....Some products are tested by clinical evaluation by group of independent medical experts and some are given to labs for testing. Since the Collagen sheets which are used for control of the bleeding on surgical procedures and the tests are conducted by the medical experts by clinical evaluation. The other averments contained in para 11, that the petitioner is supplying to to other hospitals is no other consequences."

4. In the light of the stand taken by the respondent, there is no case made out. Accordingly, W.P.No.155 of 2010 will stand dismissed.

5. W.P.No.934 of 2010 relates to the tender floated by the respondent Corporation for supply of surgicals and sutures for the year 2010-2012. In the eligibility criteria for the tenderers, it was stated in Clause 2 (b) that the average annual turnover in the last three years ie., 2006-2007, 2007-2008 and 2008-2009 shall not be less than 2 Crores and turnover for the year 2008-2009 should also be not less than Rs.2 Crores. It was contended that the said condition has no nexus to Clause 2(a) and Clause 2(b) of the Tender Document corresponding to the Tender Value and it was arbitrary and violative of Article 14 of the Constitution.

6. In the second writ petition, notice of motion was ordered and the petitioner was directed to serve the learned counsel for the respondent. Pursuant to the same, the respondent Corporation has filed a counter affidavit dated 08.04.2010. Series of objection was raised for the petitioner's locus standi to challenge the condition found in the notice inviting tender. The reason for imposing the condition is set out in Para 9 of the counter affidavit, which is as follows:-

"9. The tender inviting authority has got every right to fix the eligibility criteria as deemed fit and the reasons for such criteria need necessarily be indicated in the tender document. It is the prerogative of the tender inviting authority to arrive at the appropriate qualification criteria taking into consideration various aspects such as the experience gained out of previous contracts and the demand vs. supply capability of bidders, the necessity to have additional building of stocks to meet any eventuality / emergency and the possible set backs such as quality failure of the supplies made by the suppliers, the scarcity of raw materials in the market required for the end products, etc. The bidder has no locus standi to question such criteria fixed by the purchaser. However, in the present case the criteria of Rs.2 crores for the turn over was subsequently revised to as Rs.1 crore as being followed in the previous years and as such it has no specific implication to demanding further analysis. The petitioner is challenging in this petition the criteria fixed by the respondent as tender inviting authority."

7. In the light of the same, there is no case made out for entertaining the writ petition. Accordingly, W.P.No.934 of 2010 stands dismissed.

8. W.P.No.17453 of 2012 relates to the tender floated by the respondent Corporation for the year 2012-2014. In this case, the petitioner challenges the order passed by the respondent Corporation dated 14.06.2012, wherein and by which, it was informed that a team consisting of officials inspected the manufacturing/ importing Unit of the petitioner Company and on inspection, it was observed that the company did not follow the GMP norms as per Schedule "M" of Drugs and Cosmetics Act. A Copy of the report given by the team was also enclosed as an Annexure to the impugned order. The petitioner was informed that they were disqualified and the tender submitted by them was rejected.

9. The contention raised by the petitioner was that in all the three tenders, they offered the lowest and each time, the respondent Corporation is inventing new reasons for rejecting their tender. There was no scope for rejecting their tender on the ground that the Corporation has made some inspection. It was only to disqualify the petitioner from participating in the Price Bid.

10. However, as against the rejection order, the petitioner Company did not prefer any appeal to the State Government as provided under Section 11 of the Tamil Nadu Transparency in Tenders Act, 1998. On the other hand, they have directly filed the writ petition. In any event, the right of the respondent Corporation to inspect the premises to ascertain the quality of the production process was explained in the counter affidavit filed by the respondent. In paragraph 6, it was averred as follows:-

"6. ...As per Clause 9.10 of the tender document the tenderer shall allow the inspection of the factory by a team of experts of the Tender Inviting Authority and shall extend al facilities to the team to enable to inspect the manufacturing process, quality control measures adopted in the manufacture of the items quoted. Further as per clause 7.3(viii) the tenderer whose manufacturing unit is found to be not complying with the cGMP (current Good Manufacturing Practice) (but furnished affidavit in Annexure-III of the tender document) during inspection will be levied with a fine of Rs.50,000/- or the expenditure incurred by the Purchaser (TNMSC) in such inspection whichever is higher. The inspection of the manufacturing premises is to ensure whether the manufacturer if continuously following the compliance of cGMP conditions as per the tender requirement and revised schedule-M of Drugs and Cosmetics Act without merely relying upon the certificates furnished by the tenderers. It is further submitted that the tenderers are required to furnish a notarized declaration in the format provided at the Annexure-III of the bidding document stating that they are aware of the Tender Inviting Authorities right to forfeit the EMD and/or Security Deposit and blacklisting for a period of 5 years if, any information furnished by the tenderer is proved to be false at the time of inspection and not complying the conditions as per schedule-M of the Drugs and Cosmetics Act, for a period of 5 years. From the above, it is evident that this respondent is entitled to conduct inspection of the manufacturing premises of the bidders at any point of time as part of the tender evaluation and to decide on the acceptance/rejection of the bidder based on the outcome of such inspection. It is further submitted that such stipulations of inspection of the manufacturing premises of the tenderers are followed by this respondent corporation to ensure supply of quality products. Hence mere possession of the Good Manufacturing Certificate from the authority cannot be relied upon by the respondent Corporation and it is a prerogative of this respondent Corporation to evaluate the bidder based on the inspection visits of the tenderers manufacturing premises and decide on the acceptance/rejection of the tenderer."

11. Mr.Shivakumar, learned counsel for the respondent Corporation would contend when an alternative remedy is open to the aggrieved person, he should be required to pursue that remedy and not invoke the writ jurisdiction and in that case, the Court has got discretion to reject the writ petition. In this context, reference was made to the judgment of the Supreme Court reported in (2002) 1 SCC 216 [State of Bihar and others v. Jain Plastics and Chemicals Ltd.,In paragraph 3, it was held as follows:-

"3. Settled law - writ is not the remedy for enforcing contractual obligations. It is to be reiterated that writ petition under Article 226 is not the proper proceedings for adjudicating such disputes. Under the law, it was open to the respondent to approach the court of competent jurisdiction for appropriate relief for breach of contract. It is settled law that when an alternative and equally efficacious remedy is open to the litigant, he should be required to pursue that remedy and not invoke the writ jurisdiction of the High Court. Equally, the existence of alternative remedy does not affect the jurisdiction of the court to issue writ, but ordinarily that would be a good ground in refusing to exercise the discretion under Article 226."

12. The learned counsel also referred to the judgment of the Supreme Court reported in (2005) 12 SCC 725 [Orissa Agro Industries Corpn. Ltd. and others v. Bharati Industries and others] for contending that in case of contractual obligation, it depends upon the facts and would require material evidence to be scrutinized and in such case, writ jurisdiction shall not be exercised.

13. In respect of eligibility criteria for participation in the tender, the learned counsel referred to the judgment of the Supreme Court reported in (2011) 9 SCC 340 [Shagun Mahi

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la Udyogik Sahakari Sanstha Maryadit v. State of Maharashtra].In paragraph 52, the Supreme Court observed as follows:- "52. We are also not impressed by the submission of Mr.Rohatgi that the condition of having Rs.1 crore over the three previous consecutive years, is either arbitrary or whimsical. Mr.C.U. Singh by making detailed reference to the counter-affidavit has shown that in the State of Maharashtra, there are 34 districts having an annual value in terms of at least Rs.1.7 crores per district. Therefore, the condition of asking for minimum Rs.1 crore turnover for the last three years cannot be said to be arbitrary. In fact, the condition would be of utmost importance." 14. Lastly, the learned counsel referred to the judgment of the Supreme Court reported in (2005) 6 SCC 657 [Binny Ltd., and another v. V.Sadasivan and others]for contending that writ in the nature of mandamus can be issued only in the discharge of "Public function" and the Court must always retain the discretion to withhold the remedy where it would not be in the interest of justice to grant it. 15. In the light of these legal precedents and the factual matrix involved, there is no scope for entertaining the third writ petition. 16. In the result, all the three writ petitions will stand dismissed. No costs. Connected miscellaneous petitions are closed.
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