Prognosys Medical Systems Ltd vs Mumbai Municipal Corporation & ...
2010 Latest Caselaw 313 Bom

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            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                             O. O. C. J.




                                                                                        
                       WRIT PETITION NO.2456 OF 2010




                                                                
    Prognosys Medical Systems Ltd.                                ...Petitioner.
                            Vs.
    Mumbai Municipal Corporation & Ors.                           ...Respondents.




                                                               
                                    ....
    Ms.Rajni   Iyer,   Sr.Advocate   with   Ms.PoojaPatil   and   Mr.   H.K. 
    Bhalerao i/b. M/s.Rajesh Kothari & Co.   for the Petitioner.
    Mr.A.Y.Sakhare,   Sr.   Advocate   with   Ms.V.S.   Gharpure     for 




                                                  
    Respondent Nos.1 and 2.
    Mr.Rafeeq   Peermohiddin   i/b.   Dholakia   Law   Associates   for 
                                  
    Respondent No.3.
                                    .....
                                    CORAM : DR.D.Y.CHANDRACHUD AND 
                                 
                                                   ANOOP V. MOHTA,  JJ.

December 21, 2010.

ORAL JUDGMENT (PER DR.D.Y.CHANDRACHUD, J.) :

The Municipal Corporation invited tenders on 25

January 2010 for the supply and installation of four Flat Panel

Digital Radiography Systems at KEM Hospital. On 10 March

2010, the technical bids were opened. The Municipal Corporation

received six bids of which four were considered as being

responsive. After scrutiny of the contents of the technical bids, the

report of the scrutiny was placed before the Technical Scrutiny

Committee on 23 August 2010. Dr.Hemant Deshmukh, Professor

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in the Department of Radiology observed a demonstration

together with the Executive Engineer in the Medico Electronic Cell

in June and July 2010. A report was prepared by these two

officials and by the concerned Heads of Department at KEM, Nair

and Sion Hospitals. During the course of the scrutiny, a letter was

received from the Third Respondent on 7 May 2010 offering a

demonstration of the system installed by it in South Korea and

Turkey. This request was approved by the Competent Authority. A

team of officials visited South Korea to observe the demonstration.

Commercial bids were opened on 4 September 2010. The bid of the

Third Respondent was found to be the lowest. The report was

thereafter placed before the Common Purchase Committee,

Technical Screening Committee and Common Tender Committee

on 13 September 2010. These Committees recommended the

award of the contract to the Third Respondent. The

recommendation was approved by the Standing Committee of the

Municipal Corporation on 7 October 2010. A letter of acceptance

was issued to the Third Respondent on 11 October 2010. The

contract was executed on 19 October 2010. On 2 November 2010,

the Municipal Corporation opened an irrevocable letter of credit for

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80% of the contract amount, in the total value of US$ 784,000

equivalent to Rs.3.55 crores. The Petition before this Court was

instituted on 16 November 2010.

2. The challenge in this Petition to the award of the contract

to the Third Respondent, is on the ground that the Third

Respondent failed to meet the conditions of eligibility. Counsel

appearing on behalf of the Petitioner submitted that: (i) There was

no basis or justification for the Municipal Corporation to permit a

demonstration by the Third Respondent in South Korea since the

tender specifications provided that if needed, the tenderer would at

his cost arrange for demonstration of the equipment quoted for in

the tender in India; (ii) An essential requirement of the tender was

that the bidder must achieve a DQE (Detective Quantum

Efficiency) of at least 65% at zero line pair per millimeter.

According to the Petitioner, the Third Respondent quoted a DQE of

69% at 0.1 line pair per millimeter which did not meet the tender

specifications; and (iii) Contrary to the tender condition, the Third

Respondent had not submitted a data sheet from the manufacturer

of the equipment.

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3. Affidavits were filed originally, in these proceedings, on

behalf of the Municipal Corporation by Dr.Hemant Deshmukh,

Professor, Department of Radiology and on behalf of the Third

Respondent. In the affidavit filed on behalf of the Municipal

Corporation, the allegation as regards the failure of the Third

Respondent to fulfill the DQE parameters was denied in the

following terms:

"I say that Respondent no.3 are supplying Samsung detectors having maximum availability of maximum '69% DQE' and hence, the same meet with the

specification of minimum requirement of 65% DQE."

The affidavit of the Third Respondent was silent on whether the

requirement was duly fulfilled. By an order of this Court dated 9

December 2010, an opportunity was granted to the Municipal

Corporation and to the Third Respondent to file further affidavits

clarifying as to whether the Third Respondent fulfilled the tender

conditions.

4. In his affidavit which has been filed on 13 December

2010, in pursuance of the directions of this Court, Dr.Deshmukh

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has explained the relevance of the DQE specification as follows in

paragraph 2:

"I say that as per the tender specifications for D.R. Systems, DQE >=65% at 0 lp/mm was one of the tender specifications asked for. DQE means Detective Quantum Efficiency and ">=" sign stands for more than or equal

to. "0 lp/mm" stands for zero line pair per millimeter. This denotes spatial frequency. DQE is neither a physical component nor an accessory of the D.R. system. It is a figure expressed in percentage which is arrived after

complex mathematical calculations. Detective Quantum Efficiency is not an explicitly inscribed number on the

Equipment or the Detector, but has been the most commonly used metric of the 'overall' image quality of D. R systems. It describes how efficiently a D R system

translates incident X-ray photons into useful signal within an X-ray image. DQE is regarded as a convenient, reasonably accurate and widely accepted metric of image quality. Our specifications asking for DQE at 0 lp/mm

allows for the best chance for evaluation of DQE expressed by the Petitioner and other tenderers without

quoting non zero frequencies, while the Respondent No.3 specifically has given DQE of 69% at 0.1lp/mm."

Dr.Deshmukh has stated that the Third Respondent had given a

technical specification of DQE as more than 69% at 0.1 line pair

per millimeter. The tender specification was at zero line pair per

millimeter while Samsung, whose equipment was supplied by the

Third Respondent, had quoted for 0.1 line pair per millimeter.

The affidavit clarifies that the DQE of 69% of the Third Respondent

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technically will be more than what is asked for by the technical

specification. A graph is annexed to the affidavit.

5. In the affidavit which has been filed by the Third

Respondent, it has been stated that in the data sheet submitted by

the Third Respondent to the Municipal Corporation, there is a

column showing X-ray performance rate. A decrease in the line

pair per millimeter increases the DQE. According to the Third

Respondent, the requirement of DQE of at least 65% was achieved

by the Third Respondent at 0.1 line pair per millimeter. According

to the Third Respondent, the measurement of DQE at zero line pair

per millimeter is only an extrapolation to estimate the value

outside the known range.

6. On behalf of the Petitioner it has been submitted that

neither in the affidavits as originally filed, nor in the further

affidavits that have been filed, have the Respondents established

the fulfillment of the tender condition by the Third Respondent.

7. At the outset, while evaluating the submission, the Court

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must be mindful of the fact that in an area involving technical

expertise, the Court must be conscious of the limitations on its own

jurisdiction to enquire into disputed factual issues particularly

involving a scientific bearing. The Court in such cases is essentially

concerned with the decision making process. There are well settled

parameters for the exercise of judicial review. The award of a

contract can be set aside on grounds of illegality, irrationality or

procedural impropriety. There is an element of judicial restraint in

judicial review of administrative action and the Court rarely if ever

sits as a court of appeal. Unless there is a patent illegality in the

assessment of a tender evaluation committee of the technical

qualifications of a selected bidder, the Court would not ordinarily

interfere under Article 226 of the Constitution. These principles

emerge from several judgments of the Supreme Court, among

them being the judgment in Siemons Public Communication Pvt.

Ltd. vs. Union of India.1 The Supreme Court there reviewed the

body of law on the subject, including the earlier decision of the

Court.

    1 A.I.R.2009 SC 1204





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8. Now, the data sheet which was submitted by the Third

Respondent reflected a DQE of 69% at 0.1 line pair per millimeter.

At 0.1 line pair per millimeter, the required parameter of a DQE of

at least 65% is achieved and in fact exceeded. The fact that the

Third Respondent achieved the parameter at o.1 line pair per

millimeter does not lead to the acceptance of the contention of the

Petitioner that the DQE of the product which is to be supplied by

the Third Respondent would fail to meet the tender specification of

a minimum of 65% DQE at zero line pair per millimeter. The data

sheet which has been placed on the record by the Third

Respondent in Exhibit 'B' to the affidavit filed before this Court on

14 December 2010, in fact, shows that as the DQE reduces from

3.5 line pair per millimeter to 0.1 line pair per millimeter, the

measured DQE value increases from 20.7 to 69.0. On this basis,

particularly when in the affidavit which has been filed on behalf of

the Municipal Corporation by Dr.Deshmukh, it has been stated that

the DQE of 69% of the Third Respondent will be more than what

is asked for in the technical specification, there is no reason for the

Court to sit in judgment in the manner of an appeal. That would

not be the proper scope of the exercise of the writ jurisdiction. The

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Third Respondent, as the record before the Court indicates,

submited a data sheet and the only question was as to whether that

the data sheet which had been submitted fulfills the technical

specifications of the First Respondent. We do not find any

perversity in the administrative decision that was taken in this

regard.

9. The tender specification contained a requirement that

when needed the tenderer at his cost should arrange for the

demonstration for the equipment quoted for in India within fifteen

days from the intimation of a request for demonstration. The

Third Respondent has, in the affidavit dated 1 December 2010 filed

in these proceedings, explained the reason why, it had suggested to

the Municipal Corporation to permit a demonstration to be held in

South Korea of a D.R. system installed by the Third Respondent.

The relevant part of the affidavit reads as follows :

"The 1st Respondent has sought for certain specific

additional features like Auto positioning, auto collimation etc. It is significant to mention that these additional features are optional in nature and the existing customers of this respondent did not opt for them in the DR Systems supplied to them in India.

Hence, what differs is only some additional features (which the first respondent opted), while in respect of technology, the DR systems (offered by this respondent)

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are exactly similar to the one which are already supplied/installed by this respondent to their existing

customers in India. Hence, though the DR systems with similar technologies supplied/installed by this

respondent are available in India for inspection, this respondent requested the first respondent for inspection of the DR systems (with additional features sought for by the first respondent) abroad. It was only in these

circumstances, the necessity for inspection abroad arose and the first respondent thought it fit and agreed to inspect the machine abroad as well, wherein a customer had installed the machine with all these features."

10.

One of the tender specifications was that only those

tenderers who have installed and successfully commissioned at

least two Digital Radiography Systems in India in the previous

three years would be eligible to apply. The Third Respondent did,

as a matter of fact, fulfill this requirement. In its affidavit, the

Third Respondent has stated that at the time of the submission of

the tender, it had more than twelve installations in large hospitals

and medical colleges such as Apollo Hospitals at Chennai, Delhi,

Bangalore and Kolkata, at five medical college hospitals run by

Uttaranchal Government and at three Mumbai Municipal

Corporation hospitals. Counsel appearing on behalf of the

Municipal Corporation has also, in order to establish the bona fides

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of the administrative decision, adverted to a certificate dated 10

March 2010 issued by Apollo Hospital and another certificate

issued by Godavari Imaging Science and Research Centre Pvt.Ltd.

to the Third Respondent. The Third Respondent had also supplied

a list of all the installations where it had provided Digital

Radiography Systems.

11.

The bid of the Third Respondent was accepted since it

was lower than the bid of the Petitioner. As we have already

noted earlier, following the acceptance of the bid, a contract was

signed on 19 October 2010. The Municipal Corporation has

opened an irrevocable letter of credit of 2 November 2010 for an

amount of about Rs.3.55 crores. The Petition has been filed only

on 16 November 2010 after this process was completed. Hence,

the Court must in addition, weigh in balance the circumstance that

intervention at this stage, is liable to result in the invocation of the

letter of credit by the supplier. The Petitioner was not unaware of

the fact that the bid of the Third Respondent was found to be

technically responsive for, it was on that basis that the commercial

bids of all the responsive bidders were opened on 4 September

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2010.

12. For all these reasons, we are of the view that it would

neither be appropriate nor proper for this Court to interfere in the

exercise of the writ jurisdiction under Article 226 of the

Constitution, particularly having regard to the well settled

parameters governing the exercise of this jurisdiction in a matter

relating to the award of public contracts. Even if the Court were to

come to the conclusion that the administrative decision is a

possible decision to be arrived at on the basis of the material on

record, the Court would not be inclined to interfere. In the

absence of any perversity, illegality or procedural impropriety, it

would not be proper for this Court to intervene in a petition raising

the grievances which we have dealt with earlier.

13. The Petition is accordingly dismissed. No costs.

( Dr.D.Y.Chandrachud, J.)

( Anoop V. Mohta, J.)