The division judge bench of the Jharkhand High Court held that mere pricing of a product cannot be the sole criteria for declaring a Bidder successful as quality of the product, while meeting the specifications as per the Tender Documents would be the predominant features governing such selection.
Brief facts
The factual matrix of the case is that the Petitioner is a company incorporated under the Companies Act, 1956, and the respondent no. 1- Jharkhand Medical & Health Infrastructure Development & Procurement Corporation Ltd. is a Government of Jharkhand entity. Respondent No. 1 published a tender for the supply of PICU equipment. The petitioner submitted its bid for the supply of the Defibrillators. Thereafter, respondent no. 2 invited the three Bidders for demonstration of their quoted products before the Expert Committee for verification of Technical Specifications. In this demonstration, the Petitioner demonstrated the product named ‘Mediana Defibrillator D700’ while respondent no. 3 had demonstrated ‘Zoll Defibrillator R-series. ’ Furthermore, the Petitioner pointed out that the Defibrillators intended to be supplied by respondent no. 3 was not as per the technical specification, and the exercise of the demonstration was again fixed and, in that exercise, the Petitioner had demonstrated the capability of its Defibrillator which it intended to supply. The bid of the Petitioner was rejected and the technical bid of the Respondent no. 3 was accepted. The writ petition was filed by the Petitioner which was later withdrawn after submitting that the authorities concerned are reevaluating the rejection of the technical Bid of the petitioner. Then, the notice was issued by the Respondent authorities containing the extracts of the decision of the Tender Committee. Aggrieved by this, the present writ petition is filed.
Contentions of the Petitioner
The Petitioner submitted that the Petitioner had cleared all the requisite criteria and the supply of the Defibrillators by the Petitioners was technically better than that of Defibrillators supplied by Respondent no. 3. It was furthermore submitted that an exorbitant price has been quoted for the Defibrillators intended to be supplied by the respondent no. 3 and since 118 nos. of Defibrillators are to be supplied the total difference in the quoted price of Defibrillators by the petitioner and respondent no. 3 would be to the tune of Rs. 14,20,56,466/-. Also, the decision of the tender committee deserves to be set aside as the entire exercise carried out by the Corporation speaks of unreasonableness and arbitrariness.
Contentions of the Respondent
The Respondent submitted that the Petitioner suppressed the fact that the corrigendum which was issued and which specifies that chest compression rate and depth feedback facility should be integrated with the Defibrillators and the requirement of the integrated component was missing in the Tender Clause Description. It was furthermore submitted that when considered against the backdrop of the corrigendum outlining the requirement of an integrated component, the defibrillators that the petitioner was attempting to supply were disqualified. While relying upon the decision of the expert committee, it was submitted that Defibrillators to be supplied by respondent no. 3 are much superior in quality to that of the Defibrillator demonstrated by the petitioner and can be used on neonatal and paediatric patients and are equipped with the latest technology thus having a higher price than that of the Mediana D700 Defibrillator.
Observations of the court
The Hon’ble Court observed that Defibrillators are medical devices that shock the heart with electricity to restore a normal rhythm and prevent potentially dangerous conditions like arrhythmia, ventricular tachycardia, or ventricular fibrillation. For this reason, they are considered life-saving equipment. The specifications that were made in the Tender Document in the corrigendum couldn’t be met by the Mediana Defibrillator and, the Bid of the petitioner was disqualified. Furthermore, the Expert Committee made its decisions based on the findings and proof that the Bidders had provided. Additionally, since the Committee is made up of subject matter experts in the area, which has been acknowledged by Respondent No. 1, its observations cannot be challenged, especially when the Committee has provided pertinent justification for its determination of the Bidders' eligibility or ineligibility.
The court noted that the price of a product alone cannot be the sole criteria to determine a successful bidder; rather, the product's quality and compliance with the standards given in the tender documents will be the primary factors influencing this decision.
The court relied upon the judgments titled State of Kerala and Another versus RDS Project Ltd. and Others, Agmatel India Private Limited versus Resoursys Telecom and Others, Bharat Coking Coal Limited and Others versus AMR Dev Prabha and Others, Tata Motors Limited versus Brihan Mumbai Electric Supply & Transport Undertaking (BEST) and Others, N.G. Projects Limited versus Vinod Kumar Jain and Others, and Silppi Constructions Contractors versus Union of India and Another.
It was furthermore noted that in cases involving contracts, the court's writ authority restricts its ability to evaluate the decision-making process unless it is flawed with arbitrariness or characterized by irrational and illogical decisions.
Based on these considerations, the court was of the opinion that the decision taken by the respondent no. 1 was in tune with the fundamental necessities based on the conditions put forward in the Tender notice and its subsequent corrigendum and backed up by sound reasonings as well.
The decision of the court
With the above direction, the court dismissed the Writ Petition.
Case title: Hosco Pvt. Ltd. Vs Jharkhand Medical & Health Infrastructure Development & Procurement Corporation Ltd.
Coram: Hon’ble Mr. Justice Rongon Mukhopadhyay, and Hon’ble Mr. Justice Deepak Roshan
Case No.: W.P.(C) No. 518 of 2024
Advocates for the Petitioner: M/s. Sumeet Gadodia, Shilpi Sandil Gadodia, Shruti Shekhar, Nillohit Choubey, Ritesh Kumar Gupta, Advocates
Advocates for the Respondent: Mr. Piyush Chitresh, A.C to A.G.
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