Allowed

M/s. Sri Vijaya Scientifics v. State of Telangana and Another

Telangana HC27 Sept 2021WP/10490/2021

Case brief

AI extract

What is this about?

Payment for supplied and accepted COVID-19 rapid antigen test kits was withheld over quality complaints. The court allowed the supplier’s writ petition and directed release of the outstanding payment within two months, with 7.5% annual interest from the due date until realization.

What did the court decide?

Release of outstanding payment for the two lakh test kits within two months of receipt of the order, with 7.5% annual interest from the due date until realization.

M/s. Sri Vijaya Scientifics Vs State of… — Public Procurement and Tenders | Telangana HC (2021)

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HIGH COURT FOR THE STATE OF TELANGANA AT HYOERABAD (Special Original Jurisdiction)

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MONDAY,THE TWENTY SEVENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY ONE

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PRESENT

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THE HONOURABLE SRI JUSTICE K.LAKSHMAN

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WRIT PETITION NO: 10490 OF 2021

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Betwee n:

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M/s. Sri Vijaya Scientifics, Office No.36, 1St Floor, Raghava Ratna Towers, Chirag Ali Lane, Abids, Hyderabad Rep. by its Proprietor, V. Balaji, S/o. V. Bhaskar Rao, Aged about 54 years,

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...PETITIONER

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AND

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1 State of Telangana, Rep. by its Principal Secretary, Department of Health and Family Welfare, Secretariat, Hyderabad.

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2 Telangana Medical Services and lnfrastructure Development Corporation,^(An Enterfrise of Govt. of Telangana State), Department of Health and Family Welfare, 2nd Floor, DM and HS Campus, Koti, Sultan Bazar, Hyderabad^- 500 095, Rep. by its Managing Director.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of lndia^prayingthat in^the circumstances stated in the affidavit filed therewith, the High Court^{may be pleasedto} issue a Writ of Mandamus or any other appropriate Writ, Order or Orders,^{Direction or} Directions to declare the inaction of the 2nd respondent^{in not releasing the amount} due to the petitioner towards the lnvoice Nos.296 and 297,^{daled1211112020 and} 13t1112020 pertaining to the Purchase Order dated 12111/2020 towards^{supply of two} lakh numbers of COVID-19 Rapid Antigen Test Kits, despite consuming^{the same,as} arbitrary and u ncon stitutio na I and to issue a consequential^direction to^{the 2nd} respondent to release the amount to the^petitioner as against^{the lnvoice Nos 296} and 297, daled 1211112020 and^{1311112020pertaining} to^{the Purchase Order dated} 1211112020 towards supply of two lakh numbers of^{COVID-19 RapidAntigen Test} Kits.

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lA NO: 1 OF 2021

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Petition under Section 151 CPC^praying that in the circumstances^{stated in the} affidavit filed in support of the^petition, the High Court^{maybe pleased to directthe} 2nd respondent to release the amount to the^petitioner as^{againstthe Invoice} Nos.296 and 297, daled 1211112020 and^{1311112020pertaining to the Purchase Order} daled 12111/2020 towards supply of two lakh numbers^{of COVID-19 Rapid Antigen} Test Kits, pending disposal of the Writ Petition.

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Counsel for the Petitioner:SRl. VEDULA SRINIVAS^{SENIOR GOUNSEL REP'}

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SMT. VEDULA CHITRALEKHA

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Counsel forthe Respondent No. 1: GP^{FORMEDICAL& HEALTH}

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Counsel for the Respondent No. 2:^{SRI' P. KISHORERAO}

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The Court made the following:

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THE HONOURABLE SRI JUSTICE K.LA]If]HMAN

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WRIT PETITION No.1O49O OF 2021

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ORDER

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This Writ Petition is filed by the petitioner seel(ing to declare the inaction of the 2"d respondent in not releasing the irmount due to the petitioner towards Invoice Nos.296 and 297, dateri 12.11.2020 and 13.11.2020 respectively which pertain to the purchase Order dated 1.2.1I.2O2O towards supply of two lakh COVID-19 Ilapid Antigen Test Kits, (for short, 'RAT kits) despite receiving and u.sing the same, as illegal and for a consequential direction to the 2nd respondent to release the said amount to the petitioner as sought 1or.

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Heard Sri Vedula Srinivas, learned Senior Counsel representing Smt. Vedula Chitralekha, learned counsel for the petitioner, Sri P.Kishore Rao, learned Standing Counsel appearing for the 2nd respondent and learned Asst.Govt. pleader jbr Medical, Health and Family Welfare appearing lor the 1.t respondt:nt. perused the record.

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CONTENTIONS OF THE PETITONER:.

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The petitioner herein, a proprietary conoern is engaged in distribution of medical equipments and consurnables to the 2"d respondent herein and also to similar bodies in various States throughout the country. The petitioner herein is zLlso a distributor of products of M/s Mylab Discovery Solutions privatr: l,imited (for short, 'MylabJ and the said company which is a start up MSME company claims to be the first company to get ICMR apl)roval for Covid- 19 Testing kits and the said kits have been distribu._erl to several State Ciovernment Organizations at Jammu and Kashrnir, Delhi, Uttar Pradesh, Bihar, Karnataka, Maharashtra and Andhra pradesh

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including the lna respondent h erern. The petitioner being a distributor of those products has been contributing to the cause of fighting against the pandemic.

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The 2"a respondent had called for tenders vide short Tender Notice No.4C2.2/TSMSIDC/EeU/2O2O_21, dated 01.10.2020 for suppiy of Lab Reagents and Consumables and also for the procurement and supply of items like COVID- l9 Rapid Antigen Testing Kits, (COVID- 19 Rapid Kits) _ Anribody Testing Kits, 1 gG ELISA Test Kit, CLIA SARS _ CoV-2 1gG Antibody Assay at cost per test, to all Government Hospitais/ Government Medical Colleges for testing and treating Corona Virus in Telangana State.

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The petitioner herein submitted its tender for supply of COVID-l9 RAT Kits and there were some more tenderers. The tenderers had physically demonstrated the kits and also the manner of using it in front of Technical Team of the 2nd respondent and only after the due evaluation and approval by the Technical Team, the tender of the petitioner was accepted and the petitioner was issued with two Purchase Orders, dated 12.11.2O20 and 13.11.2020 for supply of two lakh Test Kits and three lakh Test Kits respectively. The value of the said supplies are Rs.5,48,80,000 / - and Rs.B,23,20,O0O / - respectively. The Purchase Orders contain various terms and conditions relating to the execution of the supply of Kits.

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The petitioner had successfully suppiied the kits under the above-mentioned Purchase Orders and the entire supplies were received and utilized by the 2"d respondent by way of distribution to the Government Hospitals and Government Medical Colleges etc. The petitioner had raised invoices as against the above-mentioned supplies vide Invoice No.297, dated 13.11.2020 and Invoice No.296, dated 12. 11.2020.

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7 onhavingreceivedCertainoralComplaintsllertainingtothe qualitv of^{the kits supplied by the petitionera nd which were} manufactured^{by Mylab,the Technical Head of the stLid Manufacturer} had personally^{demonstrated the kit belore the Directorof Public} Health, Government^{of Teiangana on 03 '12 '2020 a::rd discussedthe} issue highiighted^{by the Technicians' The Director \Yas fully satislied} after the^{practical demonstrationof the mannerof using the TestKits} was observed that^{the issuedoes not lie with the cualityof the Test} Kits supplied by^{the petitionerbut not following the protocol of the} Test Kits. The Technicians^{wereadding more quanr'iqyof buffer than} the required quantity of two^{drops, whichresulr'e<l in inaccurate} results. As being demonstrated to the^{Directorof Health, the Test Kits} supplied by the petitioner and manufactured^{by My1ab,were approved} by the ICMR after successful evaluation of three^{batches.Even the} batch supplied to the 2"d respondent was^given Cer,ifrcate of^Analysis by the Quality Assurance Department. Various ac<:redited labs have also given third party performance full evaluation re rort.

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The petitioner has been paid the value of supplies in respect of the Purchase Order dated 13.11.2020 relating t.o supply of three lakh Test Kits, whereas it has not been paid the amotint pertaining to the supply made under the Purchase Order dated 12.71.2O2O for two lakh Test Kits. On enquiries, the petitioner came to know that the same has been withheld due to certain complaints r,:ceived at the field level relating to the quality of the Test Kits. The 2"d respondent had examined those complaints and also received a denlonstration by the Technical Head of Mylab and got satisfied with us e of the kits. The petitioner reliably came to know that the auth rrities of the 2"d respondent were also satislied rvith the quality and 'vorking ol the Kits and that the Technicians were not properly using thr: same and they

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required training sessions. He also found that t1-e Technicians at the field level were using excess quantity of buffer which was resulting in inaccurate results and lead to suspicion over the quality of the Test Kits. Though at one stage, the 2'd respondent had decided not to procure the Test Kits of My1ab, after being satisfied with their quality, had the supplies made by the said company. The petitioner also came to know that the 2nd respondent had already informed the Director, Public Health, Hyderabad of the abovementioned issues and is awaiting a reply from him. However, so far the petitioner has not been paid in respect of two lakh Test Kits supplied by it which alreadl.used by the 2n,: respondent. It has become difficult for the petitioner to conduct its operations. Huge amount of nearly Rs.6 Crores is not paid by the 2na respondent despite several requests for the release of the said amount. The petitioner had also met the Managing Director of the 2"d respondent with regard to the said payment. Since there was no response from the 2'd respondent and payment was not made, the petitioner filed the present writ petition.

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CONTENTIONS OF THE 2ND RESPONDENT:-

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On the other hand, the 2nd respondent has filed a counter narrating entire facts and contended that the Director, Public Health, Telangana has requested the 2nd respondent for procurement and supply of COVID- 19 RAT Kits as intensive testing is being carried out throughout the State of Telangana. It is also specifically mentioned about the advice ol the Medical Supplies Procurement Committee and its approval lor calling tenders. Accordingly, the Tender Notification dated 01.10.2020 was issued. The petitioner herein stood as Ll. The details of the price quoted etc., by the other tenders including the petitioner herein was also specifically mentioned. The 2nd respondent further contended that the petitioner had made supplies against the

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Purchase Orders within stipulated time and the strcks were accepted by 2nd respondent and issued the same to the deslinations requested by the Director, public Health, Hyderabad as per the quantities provided in the distribution list. The petitioner had submitted the invoices for an amount of Rs.g,23,3O,OOO/_ on 22.) l.2X2|against the Purchase Order dated 13.11.2020 and the 2,r respondent had admitted the bills and passed the bills fo - an amount of Rs.7, 13,83,200/ - duly deducting the statuton. deductions and withholding the performance security amount anci transferred an amount of Rs.7,13,83,2O0/_ into the petitioner,s account on 27.11.2o2o. The petitioner had simurtaneously suL,mitted bills for the supplies made against the purchase Order dated l,). i 1.2020 lbr an amounr of Rs. S,4B,BO,O00/ - on 1g. i 1.2020 and rhe 2nd respondent had admitted and processed the bills for an amount of Rs.4,85,68,8O0/ - duly deducting the statutory deductions and withholding the performance security amount on 2Ii. I l.2O2O.

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It is further contended by the 2nd respondent that on 28.11.2O2O the Director, public Hea.lth, Telangana, had informed the 2"d respondent about conducting of a Video confert:nce and receipt of complaints against Mylab, the Manufacturer of ttre material, which are as follows:_

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"lssues observed in newly supplied RAT kits from MyLABS: 1 . If buffer solution added showing no rer)ult in the kit {No control line & No ", .."riji"Jt

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1. "GHOST LINE,- Grey line appearing or the test line mistaken as positive,

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1. False positives,

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1. Insufficient quantity of buffer solution,

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1. Supplied leaking buffer tubes. ,,

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In this regard, the Director of Public Health, Telangana, requested thc 2nd respondent to supply good quality of RAT Kits as per lhe target and as per requirement of 33 districts and not to suppiy 'Mylab' COVID- 19 Antigen Card Test Kits, which were showing significant errors in the testing process.

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In view of the said adverse report received from the User Department i.e. Director, Public Health, Telangana, the bill processed against the Purchase Order No.373/350/TSMSIDC/DIAG-REAG/20, (lO282OO22l5) dated l2.ll.2o2o was withheld on the ground that the Test Kits supplied bv the petitioner's firm are substandard. Mvlab, the manufacturer of the kits, supplied by the petitioner, had submitted a detailed clarification to the Director, Public Health Telangana, about usage of kits etc., and the Director, Public Health, Telangana vide his office letter dated 09.02.202 1 forwarded the same to take further action in the matter. The 2"d respondent is the nodal agency for procurement of drugs, surgical consumables, equipment and furniture etc., to all the HODs of the Health Department of Teiangana as per the indents submitted by them.

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In view of the same, the 2"d respondent addressed a letter dated 17.02.2021 to the Director, Public Health, Hyderabad to offer his specific remarks on the representation made by Mylab for taking further action in the matter and is awaiting a reply from the Director, Public Health, Telangana.

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With the said submissions, the 2nd respondent sought to dismiss the present writ petition.

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ANALYSIS AND FINDING OF THE COURT:.

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From the above said submissions, the undisputed facts are that the 2nd respondent has issued tender notice dated 01.1O.2O2O calling tenders for supply of 4 diagnostic items with 10 lakhs COVID-

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19 RAT testing Kits. The petitioner has particip,ated in the said tenders and stood as the successful bidder (L1). ,\s per the tender conditions, it was found that the L2 and, L3 bidders have quoted their price as 246/- and 260/ -respectively. It was not m()re than loyo that of L1 who quoted of Rs.245/- and hence L2 and 1.3 bidders were eligible for splitting and L 1 , L2 and, L3 bidders u,ould be issued Purchase Orders in the rario of 5O%( Ll), 30% (L2) and 2Oo/o (L3) and, that L2 and L3 have ro reduce their price for that or Lr only subject to submission of consent to match the L1 price which was in terms of the tender conditions. The matter was placed before the Bid Finalization Committee headed by the 1sr responde nt for approval of L. 1's rate. The Bid Finalization Committee hrld approved the proposals and as per the consent given by L2 and L3 to match with the Ll price, splitting was arowed and purchase c,rclers were issued to the petitioner for supply of their share of S,CO,OOO/_ RAT kits under two different purchase Orders dated 12.1L.2O2O and 13.11.2020 for supply of 2lakhs and the othe:. for 3lakhs kits respectively. The petitioner had made supplies agaiest the above said Purchase Orders within the stipulated time and the stocks were accepted by the 2"d respondent. The same were issr.red to destinations as per the request of the Director of public Health, Llyderabad.

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1 5. While so, the petitioner had submitted an invoice for an amount of Rs.8,23,20,00O/ - on 29.11.2O2O against the purchase Order datcd 13. I 1.2020 and the 2,,d respondent had admitted bills and cleared the same to a tune of Rs.7, 13,g3 ,2O(t / -. The petitioner had submitted bills for the supplies made against the purchase order dated 12.11.2O2O for an amount of Rs.S,4g,gO,OOC/_ on 1g.1 1.2O2O. The 2nd respondent had admitted the said bills zLnd processed the same for an amount of Rs.7,13,g8,200/- duly making statutory

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deductions and withholding^{performance securiry amountand} transferred an amount of^{Rs.7,13,83,200/-into the account of the} petitioner on 27.11.2020. Thus, 2nd^{respondent had cleared the said} amount towards the^{petitionerherein.}

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As per the Purchase^{Order dated12.11.2O2Oand} 13.11.2O2O issued by 2'd respondent,^{the bidder shall acknowledge} the^purchase order and^{submit dated acknowledgmentletter in token} of having received the^{Purchase Order,within5 days from the date of} issue of the Purchase^{Order, failing whichthe Purchase Order shall} be deemed cancelled in^{accordance with tender conditions'The} bidder has to supply^{within 10 dayson receipt of the Purchase Order'} There is also a^{penalty clause according to which 5% of the value ol} goods supplied late will^{be leviedfor each day'sdelay or part thereof} upto 7.570 of^{value of late delivered goods'Once 7 '5o/o is reached'} purchase order is deemed to^{be cancelled for undeliveredgoods No} payment shall be made^{for goods delivered under the deemed} cancelled Purchase Order.^{It is also specifically mentioned in the} Purchase Order that^{gOoh of the payment will be made on receiptof} the Material Received Certilicate^{(MRC) from theconcerned} CMSs/lnvoices, stock^{entry page number of the concerned Hospitals} and the remaining^{10% will be releasedon receivingof no adverse} report from the user^{departmentswithinthree months or after three} months if no adverse^{report has been receivedfrom the user} department, it wiil be^{treated as non-adverseperformance report} automatically with^{or withoutreceiving the report'}

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In the counter,^{the 2n'1 respondent has stated that on} 28.\1.2O2O, the Director,^{PublicHealth, Telangana on whose request'} the RAT Kits^{were procuredand supplied, had informed the 2nd} respondent about the^{complaints received by him with regardto the}

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supplies made by the petitioner during video conference and requested to supply good quality of RAT Kits as per the target and as per requirement of 33 districts and not to supply ,Mylab,COVID_lg Antigen Card Test Kits, which rvere showing signific ar_rt errors in the testlng process

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In view of the adverse report receivec from the user department, the bill processed against the purchlse Order dated 12.11.2O2O was withheld by the 2,,d respondt:nt. Mylab, the manufacturing company of the said Kits, supplied b5. the petltloner had addressed a letter dated 31 .12.2O2O to the D,irector, public Health, Telangana, who sought certain clarifications with regard to quality issues raised by the user department. The Technical Head of the said company had demonstrated their kits in the chambers of the Director of Health and discussed the issues highlighted by the Technicians in detail and the Director, after fuliy being satisfied with the practicar demonstration, found that the issue u,as not with the quality but with regard to not following of the protocor of the Test Kits, supplied by the petitioner. While using the Test Kits, the technicians * ere adcling more quantity of buffer which resurte d in inaccurate results whereas only two drops of buffer should be adtled. The same was practically sholl,n by the user department to thr 2nd respondent including the District Surveillance Officer (DSO), Mr:dchal and they were convinced and therefore, Mylab requested the 2od respondent and the user department to re_consider the same. The Director of Public Health, Telangana vide his letter dated Og .O2.2O21 by duly enclosing a copy of the representation dated 31.12.2O2O submitted by the Manufacturing company, requested the 2nd resl>ondent to take further action in the matter.

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The 2nd respondent is the Nodal Agency for procurement of drug etc., to all the HODs of Health Department as per the indent submitted by them. The User Department itself has informed the 2n(j respondent about the standard of the Kits supplied by the petltioner. the 2nd respondent had addressed a detailed letter dated 17.o2.2021 to the Director, Public Health, Hyderabad to offer his specific remarks on the representation submitted by Mylab for taking further action in the matter and a reply is awaited from the Director of public Health.

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In the letter dated 77 .02.2021 addressed by the 2,d respondent, the 2"d respondent had specifically mentioned that the Technical Head for RAT Kits from Mylab representing Labcare Diagnostic India Private Limited, visited the 2nd respondent to address the issues/clarifications sought by the user department and also the 2nd respondent. He satisfactorily demonstrated the use of the kits as per the IFU supplied witrr the kit. His explanation ,"vas sticking to the scientific principle and the 2"d respondent r,r,as satisficd r.r.ith the explanation as well as the qualify and working of the Kit. The 2n,i respondent and also agreed to arrange Zoom training session for their technicians and replace the empty pouches/kits.

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2 1 . In the report, dated 27 .ll.2O2O, the DMHO, Bhadradri Kothagudem District, has inlormed that the Technical Head of Mylab visited the 2nd respondent to address the issues/clarifications and explained to the 2nd respondent by demonstration, the right use of the kits as per the IFU supplied with the kit. His explanation was sticking to the scientific principle and the 2"d respondent was satisfied with the explanation as well as the quality and working of the Kits and also agreed to arrange a Zoom training session for their technicians and replace the empty pouches/ kits of the RAT Kits. Thus, there was a

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satisfactory report dated 27.17.2O2O by DMHO, Bhadradri Kothagudem district.

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Referring to the representation dated .j 1 . 12.2020, the Director, Public Health and Family Welfare ride letter dated 09 .O2.2O21 informed the 2nd respondent that Mylal) has submitted a representation to consider their request as the Dire,ttor had requested not to supply RAT Kits of the state Government .o districts due to quality issues. Thus, the Director of public Health requested the 2nd respondent to consider the said representation and take further necessary action. Therefore, referring to the said facts, the 2nd respondent, vide letter dated, IT .02.202 1, requestr:d the Director of Public Health and Family Welfare, Hyderabad to give specific remarks/merits, if any, on the firm i.e. Mylab, the Manufacturing Company. The 2nd respondent is awaiting the api>roval of the user department i.e. Director, public Health and Family rvi/elfare.

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The above stated facts would reveal that there is no dispute with regard to the supply of the material by the pet.ti(rner against the Purchase Order dated 12.11.2O2O and the receipt cf rhe same by the 2,,,1 respondent. It is also not in dispute that 2n j respondent has accepted the said material and distributed the same to the destinations as requested by the user department i. 3. Director, public Health' Telangana as per the quantities provided by the distribution list. There was no dispute till 2g.l l.2O2O. There .,rzas no complaint whatsoever with regard to the quality of the material supplied by the petitioner' It was only on 2g'11.2020 when the Director, public Health had a video conference with' the District Medical arrd Health officers and DSOs, he raised certain issues with regard to the supplies made by the petitioner. Therefore, the user department -equested the 2,,r respondent not to supply Mylab COVID- 19 RAT Kirs. Thereafter. the

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Technical Head of the said Manufacturing Company, approached the 2nd respondent and also the user department for clarifications, more particularly, with regard to quality issues raised by them. The Technical Head of the Manufacturing Company demonstrated the use of kits supplied by it in the Chambers of the Director, Public Health and discussed the issues highlighted by the Technicians in detail. The Director, Public Health, had expressed satisfaction after detailed explanation and practical demonstration. The issue was not^lvith regard to quality but with regard to not foltowing^{the protocolof the} said Kits. While using the same, the Technicians^{were adding more} quantity of buffer leading to bad results where only two drops^{of the} buffer should be added. The same was^{practically shown to the} Director, Public Health and also the^{Technicians present therealong} with the DSO, Medchal, and they were convinced.

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lt is also relevant to note that^{Mylab is start up MSME} company. It is the first company to^{get commercial licensefrom ICMR} and approval for COVID-l9 Test^{Kits. They were approvedby the} ICMR after successful evaluation^{of three batches. Thus,Mylaband} also the petitioner herein have^{produced the said ICMR approval.} Based on the ICMR approval, the^{companies are allowedto sell thc} products and are also given with Certificate of Analysis^{by the} Qualit-"Assurance Department and^{variousaccreditedlabs have also given} third party performance full evaluation^{report. Mylab,the} manufacturing company has also^enclosedthe Quaiity^Assurance Department Certificate of analysis report^{of the productsto the 2"d} respondent and also third^{party performance} full^{evaluationreport} from an NABH Accredited lab for the^{verysame batches of RATKits} that they were supplying throughout^India.

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The Medical Superintendent (COVID Officer) OF Singareni Collieries Company Limited (for short, 'the SCC L') has received complaints from all SCCL area hospitals and the same were specifically menrioned in a letter dated 17.02.202 1. l'he said issues were clarified by the Technical Head of the Mylab. Th ereafter, the said Medical Officer of SCCL has submitted a satisfacl ory report dated 28.11.2020.

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Referring to all the said issues, the 2"a respondent had addressed a letter dated 17 .02.202 1 to the Direct,rr, public Heaith and Family Welfare, Telangana with a request to give specific remarks/merits if any on Mylab, the manufacturinl5 company. There was no reply from the user department.

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Thus, the above stated facts would also r:veal that neither the 2nd respondent nor the user department issued zLny letter either to the petitioner or to the said Mylab manufacturing company informing them about the quality issues of the material supplied by the petitioner. On the other hand, on coming to know about the issues raised with regard to the quality of the materiat supplied, the Technical Head of the said manufacturing company approached the user department and also the DSOs and clarified the said issues. The problem was also identified. The DSOs and also Technicians were present at the time of practical demonstration. In the letter dated 17.02.2021, the satisfactory report of SCCL, I)MHO and DSO, Bhadradri Kothagudem District were specifically mentioned. Thus, there were no issues with regard to quality of the material supplied by the petitioner which was manufactured by lr4vlab. The user department i.e. Director, Pubic Health, Telangana cannot sleep over the representation dated 17.O2.2O21 submitted by 2n,r respondent a J, and the 2"d respondent cannot withhold the pa.r'ment due to the

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petitioner on the ground that it is yet to receive a reply from the User Department though it has addressed a letter d,ated lT.O2.2O2l.

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28' As stated above, there are timerines in the Furchase Orders for supply of the material and there are penal provisions for non-supply of the provisions within the stipulated time. There are also conditions for making payments. As per the purchase Order, payment ol 9Ook shall be made on receipt of the material and MRC from CMSS/lnvoices. Balance lO% shall be paid on receiving no adversc reports to the user department within three months or after three months of adverse report will be received by the user department. No adverse performance report is received, therefore, automatically they have to clear the bills.

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29 . The petitioner has suppiied the material in terms of the said Purchase Orders. It is the obligation of the 2d respondent to make the said payments to the petitioner herein. It is also relevant to note that the petitioner herein is only a proprietary concern. Huge amount is withheld by the 2nd respondent on flimsy grounds. Therefore, 2nd respondent cannot wait for the approval of the user department. There is no persuasion, much less serious persuasion b1 2,,4 respondent from the user department for clearing said dues. The 2nd respondent herein, being the Head of the Department, is also silent on the said issue. Thus, the respondents, even alter receiving the said material from the petitioner, cannot withhold the said amount..

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As discussed above, there are no disputed facts much less serious disputed facts. It is also a settled principle that in contractual matters, writ petitions are maintainable. The said principle is laid down by the Hon,ble Apex Court in Joshi Techaologies

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International Vs. Union of Indiar. In the said judgment, the Hon,ble Apex court has relied on its principle laid down in .e,BL International Ltd. Vs. Export Credit Guarantee Corporation of India2 wherein the Hon'ble Apex Court held that merely because otrc of the parties to the litigation raises a d_ispute in regard to the facts of tle case, the Court entertaining a petition under Article 226 of the Constitution of India is not alwags bound. to relegate the parlies to a suit; and. that in an appropiate case, Lurit Court has jurisdiction to entertain a rtit petition inuoluing disputed questions of fact and the,re is no absolute bar for entertaining a utit petition euen if the sanrc aises out of a contractual obligation and/ or inuolues some disputect. auestions of fact. It held that merely because a question of fact is rai.szd, the High Court will not be justified in requiing the partA to s zek relief by the someu_that lengthy. dilotory and expensiue proces; bg a Ctuil Suit agctinst a Public Bodg.

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In Popatrao Vynkatrao patil Vs. Statr: of Maharashtra and others in C.A.No.1600 of 2O2O dated t4.O2.202O, a three Judge Bench of the Hon,ble Apex Court, held that when . petition involves disputed questions of fact and 1aw, ttte High Court u.ould be slow in entertaining the petition under Article 226 of the constitution of India. However, it is only a rule of self-restraint ar.d not a hard and fast rule. Even if there are disputed questions of lact which fall for consideration but if they do not require elaborate evidence to be adduced, the High Court is not precluded from entertaining a petition under Article 226 of the Constitution of India.

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Wirh the said findings, the Hon,ble Apex rl6p1s held that in a conrractual matters, writ petition is maintainabl,: and High Court

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KI,"I Wp 10490. 2021

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can go into the disputed questions of fact while considering a writ petition under Article 226 of the Constitution of India. The said principle was heid by Division Bench of this Court in Agni Aviation Consultants, Bangalore Vs. State of Telaagana3

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In view of the above said settled principies and also above said discussion, this Writ Petition is liable to be allowed and the petitioner is entitled for the amounts claimed by it towards Invoice Nos.296 and 297, dated 12.11.2O2O and 13.11.2O2O pertaining to the Purchase Order datcd 12.11.2O2O towards supply of two lakh COVID19 Rapid Antigen Test Kits. The respondents are liable to pay the said amounts to the petitioner herein.

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In the result, this Writ Petition is allowed with the following directions:-

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i) The respondents are directed to release amount to the petitioner as against the invoice Nos. 296 and 297, dated 72.11.2O2O and 13.11.2020 pertaining to the Purchase Order dated l2.ll.2o2o towards supply of two lakh COVID-19 Rapid Antigen Test Kits within two months from the date of receipt of a copy of this order.

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ii) The petitioner is also entitled for interest at the rate 7.5o/o p.a. on the said amount from the date of due tiil the date of realization, and

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iii) There is no order as to costs.

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35 Consequentlr', miscellaneous petitions, if an1,, shall stand /'

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closed.

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2020(5) ALD 561^(TSXDB)

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SD/-M.MANJULA ASSISTANT REGISTRAR ,TRUE COPY// ( t)'

SECTION OFFICER

To,

1 The Principal Secretary,^{Department of Health and FamilyWelfare' State of} Telangana Secretariat,^Hyderabad.

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2 f t'le fr,f"anaging^{Director, TelanganaMedical-S-ervices and lnfrastructure} D;;"i";;;;rcorporati;n'^{(An-Enterprise ol Goyof T^elansanaState)'} Health and Family^{Welfare, 2nd Floor'DM and HS Campus'Koti'}

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