Dismissed

Rajkumar Arora v. Oil and Natural Gas Corporation

Uttarakhand HC15 Dec 2020WPMS/1834/2020

Case brief

AI extract

What is this about?

Petitioner, a sole proprietor, challenged an O.N.G.C. tender condition mandating empanelment of a chain pharmacy. The Court held that eligibility conditions are for the employer to prescribe. It ruled that terms are not open to judicial scrutiny unless arbitrary, discriminatory, or mala fide. The petition to quash the condition was dismissed.

What did the court decide?

Writ petition failing to establish arbitrariness or illegality in the tender conditions was dismissed. The petition for quashing of Condition No. B.1.2 was rejected.

Rajkumar Arora Vs Oil and Natural Gas… — Public Procurement and Tenders | Uttarakhand HC (2020)

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WPMS No. 1834 of 2020 Hon’ble Manoj K. Tiwari, J.

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Mr. Aditya Singh, Advocate for the petitioner. Mr. Piyush Garg, Advocate for the respondent.

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Heard learned counsel for the parties through video conferencing.

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According to the petitioner, he runs a Pharmacy in the name & style of “Arora Medical Store” in Shahdara, North East Delhi, of which he is the sole proprietor. O.N.G.C. invited tenders in Two Bid System for empanelment of retail pharmacy chain for Satyapal Wahi Hospital, O.N.G.C., Dehradun for a period of three years. Since petitioner does not meet the requirement contained in condition no. B.1.2, therefore, he has approached this Court seeking following relief:

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“(i) Issue a writ, order or direction, in the nature of certiorari quashing the impugned Condition No.B.1.2 eligibility and experience of the bidder in the Tender No. ZM8SC2001 dated 18.09.2020 taken out by O.N.G.C. for Empanelment of Retail Pharmacy Chain for Satyapal Wahi Hospital, O.N.G.C., Dehradun, contained as Annexure no. 2 to the writ petition.”

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Condition No. B.1.2 in Annexure No. 4 to the Tender Document is reproduced below for ready reference:

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“ B.1.2 Eligibility and experience of the

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bidder :

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B.1.2-(i) (a) Bidder (i.e. Single bidder/ Indian Joint Venture company incorporated) should have at least twenty owned operational pharmacy operating as chain pharmacy outlets within India.

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Necessary documentary evidence to establish the above should be submitted with the bid.

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(b) The bidder should also have at least thirty pharmacists on their roll with valid licenses issued by state pharmacy council/Indian

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Pharmacy council under Pharmacy act 1948 or other relevant acts within India. Pharmacist’s licenses (issued by state pharmacy council/Indian Pharmacy council under Pharmacy act 1948 or other relevant acts) should be valid at the date of opening of technocommercial bid and should be submitted along with the bid.

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(c) Bidder should have valid trade license (issued by respective state Govt. authorities) and Drug Licenses (issued by Drug Controller of respective states) and the same should be enclosed with the bid.

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B.1.2-(ii)(a) The bidder should have minimum three years of experience in similar services, viz. stocking & disbursing the medicines and other hospital related materials/consumables through the retail outlet, during the last 7 years in government depts./state or central public sector companies/public limited company/reputed private companies/Corporate Hospitals.

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(b) Bidder should have executed at least 02 (Two) contracts of similar nature for a minimum duration of one year with minimum annualized contract value of Rs. 10 crores viz. stocking, disbursing the medicines and other hospital related material to the employees of government depts./state or central public sector companies/public limited company/ reputed private companies/Corporate Hospitals, through the retails outlet in the last 05 years and should submit documentary evidence to this effect in the form of satisfactory completion of services from the clients.

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To this effect (i.e. B.1.2 (ii) (a) & (b), Bidder should submit copes of respective contracts, along with documentary evidence in respect of satisfactory execution of each of those contracts, in the form of copies of any of the documents (indicating respective contract number and type of services viz. stocking & disbursing the medicines and other hospital related materials/consumables), such as-(i) Satisfactory completion/ performance report (OR) (ii) proof of release of Performance Security after completion of contract (OR) (iii) proof of settlement/release of final payment against the contract (OR) (iv) any other documentary evidence that can substantiate the satisfactory execution of each of the contracts cited above. For this purpose, the period reckoned shall be

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the period prior to the date of opening of the techno-commercial bid.”

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In the counter affidavit filed on behalf of the respondent, it has been stated that petitioner is not a person aggrieved, therefore, he has no locus to file the writ petition; it is for the respondent to ascertain the conditions of eligibility and no bidder can suggest what the conditions should be. In paragraph no. 8 of the counter affidavit, it has been stated that, for Satya Pal Wahi Hospital O.N.G.C. Dehradun, during financial year 2019-2020, total expenditure for purchase of medicines was ` 23.59 Crores, therefore, to manage such huge business, an experienced pharmacy is required, who have number of pharmacists and experience for running several pharmacy stores. It is further stated that, in the past, when small pharmacist was empanelled, he was unable to give satisfactory service to the employees, both past & present, of O.N.G.C.

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It is settled position in law that it is for the employer to prescribe the conditions of eligibility.

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Hon’ble Supreme Court in the matter of Directorate of Education and others Vs. Educomp Datamatics Ltd. and others, reported in (2004) 4 SCC 19, has held as under:

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“ 11. This principle was again re-stated by this Court in Monarch Infrastructure (P) Ltd. vs. Commissioner, Ulhasnagar Municipal Corporation and Others [2000 (5) SCC 287]. It was held that the terms and conditions in the tender are prescribed by the government bearing in mind the nature of contract and in such matters the authority calling for the tender is the best judge to prescribe the terms and conditions of the tender. It is not for the courts to say whether the conditions prescribed in the tender under consideration were better than the one prescribed in the earlier tender invitations.

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12. It has clearly been held in these decisions that the terms of the invitation to tender are not open to judicial scrutiny the same being in the

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realm of contract. That the government must have a free hand in setting the terms of the tender. It must have reasonable play in its joints as a necessary concomitant for an administrative body in an administrative sphere. The courts would interfere with the administrative policy decision only if it is arbitrary, discriminatory, mala fide or actuated by bias. It is entitled to pragmatic adjustments which may be called for by the particular circumstances. The courts cannot strike down the terms of the tender prescribed by the government because it feels that some other terms in the tender would have been fair, wiser or logical. The courts can interfere only if the policy decision is arbitrary, discriminatory or mala fide.

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13. Directorate of Education, Government of NCT of Delhi had invited open tender with prescribed eligibility criteria in general terms and conditions under tender document for leasing of supply, installation and commissioning of computer systems, peripherals and provision of computer education services in various government/ government aided senior secondary, secondary and middle schools under the Directorate of Education, Delhi. In the year 2002-2003, 748 schools were to be covered. Since the expenditure involved per annum was to the tune of Rs. 100 crores the competent authority took a decision after consulting the technical advisory committee for finalisation of the terms and conditions of the tender documents providing therein that tenders be invited from firms having a turnover of more than Rs. 20 crores over the last three years. The hardware cost itself was to be Rs.40-45 crores. The government introduced the criteria of turnover of Rs. 20 crores to enable the companies with real competence having financial stability and capacity to participate in the tender particularly in view of the past experience. We do not agree with the view taken by the High Court that the term providing a turnover of at least Rs. 20 crores did not have a nexus with either the increase in the number of schools or the quality of education to be provided. Because of the increase in the number of schools the hardware cost itself went upto Rs. 40-50 crores. The total cost of the project was more than 100 crores. A company having a turnover of Rs. 2 crores may not have the financial viability to implement

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such a project. As a matter of policy government took a conscious decision to deal with one firm having financial capacity to take up such a big project instead of dealing with multiple small companies which is a relevant consideration while awarding such a big project. Moreover, it was for the authority to set the terms of the tender. The courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. While exercising the power of judicial review of the terms of the tender notice the court cannot say that the terms of the earlier tender notice would serve the purpose sought to be achieved better than the terms of tender notice under consideration and order change in them, unless it is of the opinion that the terms were either arbitrary or discriminatory or actuated by malice. The provision of the terms inviting tenders from firms having a turnover of more than Rs. 20 crores has not been shown to be either arbitrary or discriminatory or actuated by malice.”

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Learned counsel for the petitioner then submits that the concept of Chain Pharmacy is alien to the scheme of Drugs & Cosmetics Act, 1940, therefore, the impugned condition in the tender document is violative of Section 23 of Indian Contract Act, 1872.

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This Court is not impressed by the submission made by learned counsel for the petitioner. Even if the concept of Chain Pharmacy is not recognized by Drugs & Cosmetics Act, 1940; but, there is nothing to indicate that ‘Chain Pharmacy’ is prohibited by the Statute.

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Learned counsel for the petitioner submits that, for each pharmacy, a separate license is needed in terms of Rule 62 of Drugs & Cosmetics Rules, 1945.

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Perusal of Rule 62 indicates that separate license would be needed for storage and sale of drugs at separate places, however, it does not forbid running of more than one pharmacy by a single owner. Such single owner can employ qualified pharmacists in whose favour separate

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licenses can be issued. Thus, the submission of learned counsel for the petitioner that the impugned condition violates Rule 62 is without any substance.

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In such view of the matter, this Court does not find any scope for interference in the matter. Accordingly, the writ petition fails and is dismissed.

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Arpan

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(Manoj K. Tiwari, J.)

Rajkumar Arora v. Oil and Natural Gas Corporation

Case brief

What is this about?

What did the court decide?

Rajkumar Arora v. Oil and Natural Gas Corporation

Case brief

What is this about?

What did the court decide?

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