Parenteral Drugs (India) Ltd. And ... vs Union Of India (Uoi) And Ors.
2002 Latest Caselaw 2179 Del

JUDGMENT

A.K. Sikri, J.

1. Parenteral Drugs (India) Ltd. is the writ petitioner in two writ petitions, which are, CWP Nos. 1435 & 4465 of 2002. Questions raised in both the writ petitions are identical. The third writ petition, i.e. CWP No. 3284 of 2002 is filed by 11/s Claris Lifesciences Limited. It also involves same question of law which is the subject matter of other two writ petitions. Necessarily all these writ petitions were heard together which the propose to dispose of by one common judgment.

2. For the sake of convenience, we may first take note of facts as emerge from CWP No. 1435 of 2002. On 14th June, 2001, the Ministry of Health and Family Welfare, Government of India through Hindustan Latex (India) Ltd. issued a notice inviting International competitive Bidding Re-Invitation for Bids (IFB) on Price Contract basis. This notice was published in leading newspapers of the country on 22nd June, 2001. The petitioner company also submitted its bid on 9th August, 2001 which was the last date for submission of the bids. Bids were opened on the same day at about 2.30 PM. It was found that altogether 7 companies had submitted their tender documents. Rates offered by the petitioner company were found to be the lowest.

3. Certain queries were raised by the respondent No. 3 from the petitioner vide letter dated 20th September, 2001 relating to two contracts entered into by petitioner with Punjab Systems Corporation, Chandigarh and the Director General of Medical and Family Welfare, U.P. The petitioner responded vide letter dated 21st September, 2001 giving details of the two contracts submitting that under the terms of eligibility as stated in the tender conditions the petitioner would not become ineligible. It may be mentioned at this stage that in the aforesaid two contracts, the concerned authorities have blacklisted the petitioner and the cases are pending in the High Court of Punjab & Haryana as well as the Allahabad High Court respectively. We shall advert to details of these cases at appropriate stage.

4. The petitioner, however, wrote another letter dated 20th October, 2001 giving details of the aforesaid two court cases and the interim order passed therein and reiterated that its bid should be considered on merits. This was followed by few more letters from the petitioner again pointing out that in accordance with bid conditions, the petitioner could not be rendered ineligible because of blacklisting orders in the aforesaid two cases in respect of which there were stay orders passed by the two High Courts. The petitioner even addressed its communication to the World Bank as well, as the project in question was founded by the World Bank, urging upon it to ask the respondents to consider the bids of the petitioner on merits. It may also be pointed out that in the meantime the respondent No. 2 has been asking the petitioner to extend the validity of bid from time to time which was so extended by the petitioner. However, on 22nd February, 2002 the petitioner learnt that respondents 1-3 had decided to ignore the various representations of the petitioner and, therefore, again sent letter dated 25th February, 2002 stating that any such decision of the respondents to award the contract to respondent No. 4, which they were intending to do, would be wholly illegal. However, as respondents went ahead in awarding the contract to respondent No. 4, the present writ petition was filled on 27th February, 2002.

5. It may be mentioned at this juncture that when the writ petition came up for preliminary hearing on 1st March, 2002, while issuing notice therein in CM No. 2450/2002 filed by the petitioner Along with the petition for ad-interim stay, order was passed to the effect that in case contract had yet not been awarded to the respondent No. 4, respondents 1 to 3 shall not award the contract to any person. It was also directed that contract, if any, would be subject to further orders of the court. However, before that order was passed the contract had already been awarded and it had even been signed on 14th February, 2002. We were informed that during the pendency of this writ petition even the supplies have been made to respondent No. 4 pursuant to the aforesaid contract and thus contract stands fully executed. In view thereof learned counsel for the petitioner accepted that in so far as award of contract in question to respondent No. 4 is concerned, the petition had been rendered infructuous. However, he still insisted that the petition be heard on merits primarily because of the reason that the issue as to whether petitioner was ineligible to apply for such contracts because of its blacklisting by the Governments of U.P. and Punjab still survived and would recur again as and when NIT is issued by the official respondents in future as well. In fact other writ petition, namely, CWP No. 4465/2002 has been filed by the petitioner as the bid of the petitioner in relation to another tender bid bearing IFB No. HSCC/PUR/RCH/PHARMA/ICB/2001 has been rejected on the same grounds although here again the petitioner claims that it was the lowest responsive eligible bidder.

6. Mr. H. Ahmadi, learned counsel appearing for the petitioner made threefold submissions in support of the petitioner's case. State in brief, these are as under:

a) The bid of the petitioner had to be evaluated in terms of the conditions stipulated in the NIT which, inter alia, provided that no extrinsic evidence could be taken. Therefore, it was neither permissible nor proper for the official respondents to have taken into consideration the alleged blacklisting orders passed by the Governments of U.P. and Punjab. The petitioner's bid was, therefore, rejected on irrelevant consideration.

b) In any case both the blacklisting orders were challenged by the petitioner in the writ petitions filed in the High Court of the Punjab & Haryana as well as in the High Court of Judicature at Allahabad respectively and both the courts had granted stay of the impugned blacklisting orders. As the operation of the blacklisting orders had been stayed, it was not permissible for the official respondents to take into consideration these blacklisting orders to invalidate bid of the petitioner.

c) Official respondents acted in a clandestine manner while evaluating the bids and kept the petitioner in dark from which it could clearly be inferred that they acted in a malafide manner and there was no transparency shown in the process of evaluating the bids and thus the decisions making process lacked fairness.

7. We now proceed to take up the aforesaid contentions for consideration in the same sequence.

a) RE: ARGUMENT ON EXTRINSIC EVIDENCE:

8. Learned counsel for the petitioner opened his argument by submitting that rates quoted by the petitioner were not only lowest, they were substantially lower than the rates quoted by the respondent No. 4. His submission was that as per Clause 30.1 of the NIT conditions (Instructions to Bidders) in normal course, the purchaser was bound to award the contract to the successful bidder whose bid had been determined to be substantially responsive as well as the lowest evaluated bid. As far as substantial responsiveness of the bid is concerned, the same was to be evaluated in the manner provided in Clause 24.3 which clearly stipulated that this responsiveness was to be based on the contents of the bid itself without recourse to any extrinsic evidence. Referring to Clause 2 of the same document which dealt with 'Eligible Bidders' it was urged that the bidder could have become ineligible only if it was under declaration of ineligible for corrupt and fraudulent practices issued by the World Bank that too in accordance with Sub-clause 36.1 thereof. Clause 36 enumerated what would be Corrupt or Fraudulent Practices and the case of the petitioner was not falling therein. He also submitted that the terms 'Corrupt Practice' and 'Fraudulent Practice' were defined in the General Conditions of Contract as well and the petitioner could be treated to have indulged in such corrupt practice or fraudulent practice only if its case was covered by the aforesaid definition.

9. In nutshell, the submission was that Clause 2 of Instruction to Bidders stipulated who were eligible bidders and ineligibility was attracted only if a bidder had indulged in corrupt practices or fraudulent practices as per Clause 36 and that too for such alleged corrupt and fraudulent practices, the World Bank had declared it to be ineligible. In the present case neither the petitioner was found to have indulged in such corrupt practice or fraudulent practice nor was the petitioner under any such declaration of ineligibility issued by the World Bank. Since such a declaration by the World Bank could only be a ground to make the petitioner ineligible, the so-called blacklisting by the Governments of U.P. and Punjab could not have been taken into consideration as this was extrinsic evidence which was specifically barred by virtue of Clause 24.3.

10. Mr. Mukul Rohtagi, learned Addl. Solicitor General appearing for Hindustan Latex Ltd. submitted that the petitioner was trying to read the aforesaid clause of Instruction to Bidders contained in NIT in isolation which was not permissible. His submission was that these clauses were to be read Along with other clauses relevant for the purpose. He drew our attention to Clause 32 as well which gave the purchaser right to accept any bid and to reject any or all bids and even to annul the bidding process. Drawing sustenance from this clause he argued that such a right reserved with the purchaser to reject any bid had to be on valid grounds and thus all considerations relevant to assess the suitability of a bidder in performing the particular contract would become relevant. Submitting that the contract in question was for supply of life saving drugs, before awarding contract to any bidder, it was open to the official respondents to determine its satisfaction as to whether the bidder selected as having submitting the lowest evaluated responsive bid was qualified to satisfactorily perform the contract. This consideration which was permissible for the purchaser was provided under Clause 29.1 encompassed all relevant factors. Thus in order to determine as to whether petitioner, if awarded the contract, could satisfactorily perform the contract or not, it was open to the purchaser to see its performance in other like such contracts awarded to it earlier and, therefore, the blacklisting orders in respect of the aforesaid two contracts and the reasons for which it was blacklisted were germane and relevant for rejecting the contract. Thus, it was submitted these blacklisting orders were not the extrinsic evidence as alleged by the petitioner and in any case, reliance thereupon by the official respondents was perfectly justified.

11. Mr. Jayant Bhushan, learned counsel appearing for the Union of India in CWP No. 4465/2002 while adopting the aforesaid arguments of the learned Addl.Solicitor General, additionally submitted that Clause 24.3 deals with only preliminary examination of the bids and at that stage responsiveness of the bid was to be examined. Clause 30, according to him, thereafter deals with the award of the contract and lays down further criteria for awarding the contract in addition to the examination of responsiveness of the bid adjudged in Clause 24.3 Clause 30.1 is not only subject to Clause 32 but also clearly provides that only those who are able to perform the contract satisfactorily are to be given the contract. For this purpose in order to ensure that the prospective contractor would be able to perform the contract, once awarded, it was open to the official respondents to see his past record. It was further submitted that the argument of petitioner that action of the officials respondents amounted to blacklisting it without show cause notice was totally misconceived as no show cause notice was required in such a case. In support of this proposition he referred to the minority opinion of Mathew, J. (as he then was) in the Full Bench judgment of the Kerala High Court in the case of V. Punnen Thomas v. State of Kerala which minority opinion was approved by the Supreme Court in the case of Southern Painters v. Fertilizers & Chemicals Travancore Ltd. and Anr. reporter in 1994 Supp (2) SCC 699. He also submitted that when the petitioner had no vested right, question of giving any show cause notice did not arise as was clearly held by the Supreme Court in the case of State of U.P. and Anr. v. Girish Bihari and Ors. . He concluded his submissions by contending that it was trite law that the lowest tenderer need not be given the contract by referring to Laxmikant and Ors. v. Satyawan and Ors. . (Para 4).

12. In order to appreciate the rival contentions, it would be necessary to reproduce the aforesaid clauses referred to above by both the parties:

"2.4 Bidders shall not be under a declaration of ineligibility for corrupt and fraudulent practices issued by the Bank in accordance with Sub-clause 36.1.

24.3 Prior to the detailed evaluation, pursuant to ITB Clause 26, the Purchaser will determine the substantial responsiveness of each bid to the Bidding documents. For purpose of these clauses, a substantially responsive bid is one which conforms to all the terms and conditions of the Bidding Documents without material deviations. Deviations from, or objections or reservations to critical provisions, such as those concerning Bid Security (ITB Clause 15), Applicable Law (GCC Clause 29) and Taxes and duties (GCC Clause 31), will be deemed to a material deviation. The Purchaser's determination of a bid's responsiveness is to be based on the contents of the bid itself without recourse to extrinsic evidence.

29.1 Based on the qualification criteria listed in ITB Clause 13 and ITB Date Sheet, the Purchaser will determine to its satisfaction whether the Bidder selected as having submitted the lowest evaluated responsive bid is qualified to satisfactorily perform the contract.

29.2 The determination will take into account the Bidder's financial, technical and production capabilities. It will be based upon an examination of the documentary evidence of Bidder's qualifications submitted by the Bidder, pursuant to ITB Clause 13, as well as such other information as the Purchaser deems necessary and appropriate.

30.1 Subject to ITB Clause 32, the Purchaser will award the Contract to the successful Bidder whose bid has been determined to be substantially responsive and has been determined as the lowest evaluated bid for each schedule of pharmaceuticals and/or vaccines, provided further that the Bidder is determined to be qualified to perform the contract satisfactorily for the schedule offered.

32. Purchaser's Right to Accept Any Bid and to Reject Any or All Bids.

36.1 The Bank requires that Borrowers (including beneficiaries of Bank loans) as well as Bidders, Suppliers, Contractors under Bank financed contracts, observe the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy, the Bank:

(a) defines, for the purposes of this provisions, the terms set forth below as follows:

(i) "corrupt practice" means the offering, giving, receiving or soliciting of any thing of value to influence the action of a public official in the procurement process or in contract execution: and

(ii) "fraudulent practice" means a misrepresentation of facts in order to influence the procurement process or the execution of a contract to the detriment of the Borrower, and includes collusive practice among Bidders (prior to or after bid submission) designed to establish bid prices at artificial non-competitive levels and to deprive the Borrower of the benefits of free and open competition.

(b) will reject a proposal for award if it determines that the Bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question.

(c) will declare a firm ineligible, either indefinitely or for a stated period of time to be awarded a Bank financed contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing a Bank-financed contract."

13. There cannot be any dispute that in order to determine as to what were the parameters required to be examined for evaluating the bid one has to see all the relevant clauses of the ITB and no clause is to be read in isolation. Therefore, while determining as to what are the factors which should go into the decision making process in order to determine as to whether a particular is responsive or not and what would constitute "the contents of the bid with reference to tender conditions" and what would be "extrinsic evidence" all relevant clauses have to be seen together. Once combined effect of all these clauses is examined, narrow view as advanced by learned counsel for petitioner cannot be accepted. Even Clause 24.3 on which reliance was placed by the learned counsel for petitioner to contend that extrinsic evidence was not be taken recourse to, starts wit the word 'prior to the detailed evaluation'. The heading of Clause 24 "Preliminary Examination" makes it amply clear that at that stage when the bid is evaluated as per Clause 24 it is only preliminary examination, i.e., examination done prior to the detailed evaluation. The purchaser's determination of a bid's responsiveness at that stage is to be based on the contends of the bids itself without recourse to extrinsic evidence. The detailed examination has to be as per Clause 26 which is specifically mentioned in Clause 24.3 itself. Clause 26.1 specifically stipulates that the purchaser will evaluate a bid previously determined to be substantially responsive pursuant to ITB Clause 24. Reading of these clauses would make it clear that there has to be a preliminary examination of the bid to find, on the basis of the contents of bid itself, whether the bid is responsive or not. Once it is found to be responsive, then it has to be evaluated as per Clause 26.1. While evaluating this bid no riders are attached. It would be open for the employer, at this stage, to satisfy itself as to whether the bidder selected would be able to satisfactorily perform the contract. This is in fact even specifically provided in Clause 29.1. Furthermore, Clause 30 which deals with award criteria makes it clear that the employer has right to satisfy itself that the bidder is able to perform the contract, if awarded, satisfactorily, for the schedule offered. This Clause 30.1 is specifically made subject to the ITB 32 and Clause 32 specifically confers right upon the employer to accept any bid or to reject any or all bids and even no annul the bidding process. This clearly implies that it is not necessary that even if a bid which is found to be substantially responsive and is lowest evaluated bid, is to be awarded the contract. While examining as to whether the bidder selected as having submitted the lowest evaluated responsive bid would be able to satisfactorily perform the contract or not, the past track record of such a bidder is not only a valid criterion but one of the most relevant considerations. In fact same is even provided in Clause 29.2 itself as per which, while evaluating the bid, the purchaser can take into account the bidder's financial, technical and production capabilities as well as such other information as the purchaser deems necessary and proper. Further as per this very Clause 29.2 the purchaser has to determine the bid based on examination of the documentary evidence of the bidder qualification submitted by the bidder pursuant to ITB Clause 13 which, inter alia, provides:

"13. Document Establishing Bidder's Eligibility and Qualification:

13.3. The documentary evidence of the Bidder's qualifications to perform the Contract if its bid is accepted, shall establish to the Purchaser's satisfaction that the Bidder:

(a) xxx

(b) xxx

(c) xxx

(d) has received a satisfactory GMP inspection certificate from the Food and Drug Regulatory Authority (FDRA) in country of manufacturer and has not violated any standard for the past two (2) years; and

(e) that, in the case of a Bidder offering to supply goods under the contract which the Bidder did not manufacture or otherwise produce, that the Bidder has been duly authorized by a manufacturer of the Goods that meets the above criteria to supply the Goods in the Purchaser's country..

14. As we shall notice hereafter, Sub-clauses (d) & (e) have direct nexus with the blacklisting of the petitioner by the Governments of the U.P. and Punjab.

15. The argument of Mr. Ahmad that only if the bidder is found to have been indulged in corrupt practice or fraudulent practice as per Clause 36 and that too only if the World Bank has found it to be so, a bid of the particular bidder would be non-responsive cannot be accepted in view of what we have culled out from the other ITB clauses referred to above. This can also be an additional ground to make a bidder's bid as non-responsive. Moreover, the language of Clause 36.1 clearly shows that the highest standard of ethics is expected of various categories of persons mentioned therein, which include bidders during the procurement and execution of such contracts. This implies that it relates to conduct expected after a bidder is awarded the contract. This apart, it may be significant to point out that the two contracts performed by the petitioner in Punjab & UP for which the petitioner has been blacklisted by those Governments/authorities for adopting the corrupt/fraudulent practices were also the World Bank projects. Clause 36.1 prescribes the standards which are to be adhered to by, amongst others, the bidder and once these standards were not met by the petitioner in those contracts for which it has been blacklisted, it can be deemed that the World Bank has found the petitioner having adopted corrupt and fraudulent practices. There may be force in the contention of the official respondents that the World Bank has only specified the standards as per Clause 36.1 and the authority to declare the same is left to all authorities working under the World Bank scheme. We find from the record that there were serious allegations against the petitioner on the basis of which blacklisting orders were passed by the two Governments.

16. Such a narrow interpretation as suggested by learned counsel for petitioner, even otherwise would not only be against public interest but against public policy as well. Obviously any person who has been blacklisted by any other Government Department/agency would not disclose such a fact in its bid. Insistence of such a bidder to examine only his bid and ignore the blacklisting orders passed by other Government agencies as well as the reasons which led to passing of such an order, on the specious plea that it becomes 'extrinsic evidence' would clearly defeat public interest as every bidder even with blemish record would become entitled to not only bid but may force the purchaser to evaluate his bid without looking into his past blemish conduct. This is the additional reason for which we are not inclined to accept the submissions of learned counsel for petitioner.

b. RE: BLACKLISTING ORDERS PASSED BY THE GOVERNMENTS OF UP AND PUNJAB AND EFFECT OF INTERIM ORDERS PASSED BY THE HIGH COURTS OF PUNJAB & HARYANA AND ALLAHABAD:

17. Let us now consider the effect of the two stay orders passed by the aforesaid High Courts in two writ petitions filed by the petitioner. The petitioner has challenged both the orders in Punjab & Haryana High Court as well as Allahabad High Court respectively. Stay order dated 1st June, 2001 passed by the Punjab & Haryana High Court on which reliance was placed by the petitioner is in the following terms:

"Meanwhile operation of the impugned order declaring the petitioner ineligible will operate only qua the State of Punjab and the Punjab Health Systems Corporation, Chandigarh."

18. Almost similarly worded order is passed by the Allahabad High Court dated 20th April, 2000 which is as under:

"In view of the undertaking given by the Learned counsel for the petitioner that he will not make a bid in the State of U.P. for the supply of medicines with respect to the department of Medical and Health, the operation of the impugned order shall remain stayed till that date."

19. From the aforesaid two orders it is amply clear that the impugned orders are not stayed in toto. Both the orders still operate qua the States which had passed the blacklisting orders as well as agencies in those States which were involved in procurement of the medicines. Thus petitioner is still barred from making any bid in the States of UP and Punjab. In that view of the matter how petitioner can argue that there is no such blacklisting in so far as other States/places are concerned and these blacklisting orders should not be considered at all by any such agencies/States notwithstanding the fact that the blacklisting orders operate in the States which had passed those orders. Therefore in the absence of any clear and unconditional stay order granted by the two High Courts, as we fail to understand as to how the official respondents herein could be precluded from taking into consideration these blacklisting orders while evaluating the bid of the petitioner.

c. RE: LACK OF TRANSPARENCY:

20. The argument of the petitioner was that the official respondents acted in a clandestine manner and kept the petitioner in dark. It was submitted that the cost at which the contract is awarded to the respondent No. 4 is higher by 44 per cent. It was for this reason that although contract was awarded to respondent No. 4 on 14th February, 2002 the petitioner was informed of its rejection only in April, 2002 from which it can be inferred that the official respondents did not act fairly and awarded the contract to favor respondent No. 4 even when its rates were very high. It was sought to argue that whereas the petitioner was L-1, respondent No. 4 was L-6 in respect of one time and L-3 in respect of other item.

21. In view of what we have held above, namely, the bid of the petitioner was rejected on valid considerations, this aspect of the matter falls into the pale of insignificance. However, we may notice that the official respondents have explained in the counter affidavit that the contract is a World Bank financed project for procurement of life saving drugs. When the official respondents had to purchase these vital drugs, they had to take into consideration various aspects and price could not be the determinitative factor. It is also explained that representation made by the petitioner was considered by the World Bank and the report of the Bid Evaluation Committee was also considered by it and same was cleared by the World Bank on 21st January, 2002. The World Bank had also sought clarification before clearing the contract in favor of respondent No. 4. The official respondents clarified the matter and explanation offered by them to the World Bank is also annexed by the respondents 2 & 3 Along with their counter affidavit as Annexure R-2. From this it is clear that the World Bank was apprised of all the facts. It had before it not only the representation of the petitioner but also the prices quoted by all the bidders as well as evaluation report and the World Bank had given its nod for accepting the bid of respondent No. 4.

22. It may also be added that in judicial review of such a decision of the administrative authority, we are only dealing with the decision making process and not the merits of the decision. It hardly needs to be emphasised that price is not always the decisive factor and the lowest has no enforceable right to get the contract. In arriving at a decision various aspects are to be taken into consideration even by public body as the nature of transaction is essentially commercial. The authorities also kept in mind that the matter was of vital public interest as it involved public health, since the goods in question are IV Fluids. It was for the authorities to have the comparative evaluation and decide as to whom such a contract is to be awarded having regard to various factors including standard and quality of the goods to be supplied and the ability of the bidder to supply these goods of standard quality.

23. Once we consider the matter from this angle, we are unable to accept the submission of the petitioner that process of evaluating the tender lacked transparency.

24. It was tried to contend by learned counsel for petitioner that the rejection letter dated 15th April, 2002 conveyed that the petitioner's bid had been found to be "non-responsive as per terms and conditions laid down in the bid document and hence not recommended for placement of supply order". His submission was that it was not proper for the official respondents to reject the bid on the ground that it was non-responsive as responsiveness was to be seen in terms of Clause 24. It may be that this communication uses the expression "non-responsive". However, a detailed examination has revealed that it was after evaluation that the bid of the petitioner was rejected. It would be significant to refer to the counter affidavit filed on behalf of the respondent No. 1 wherein the following statement is mode:

"As far as the allegation that petitioner is blacklisted forever is concerned, it is submitted that answering respondent have not blacklisted the petitioner when a new bid is invited, petitioner is at liberty to participate and the matter will be decided on its own merits."

25. This would allay the fears of the petitioner that petitioner is treated as ineligible to participate. The aforesaid stand of the respondent No. 1 amply clarifies that the petitioner would be at liberty to participate as and when new bids are invited and the official respondents shall decide the bid of the petitioner on its own merits. We make it clear that we have examined the petitioner's case in respect of the two contracts involved in these writ petitions only.

CWP NO. 3284/2002

26. The question of law involved in this writ petition is almost similar to the question involved in the aforesaid two writ petit ons which has been answered above. However in view of the fact that there are some additional submissions, it would be appropriate to deal with this writ petition separately as well. The petitioner in this case is the agent of M/s. Core Healthcare Ltd. which is carrying on the business of manufacturer and exporter of IV Fluids in India. It is the case of the petitioner that M/s. Core Healthcare Ltd. has installed most modern equipment for manufacturing of IV Fluids as well as surgical disposable items. The facilities available with M/s. Core Healthcare Ltd. have been inspected and approved for GMP Standard as laid down by W.H.O. and at the same time M/s. Core Healthcare Ltd. is also approved by the WHO & UNCHR, Geneva for supplies under their international aid programmers to various countries and it is also the first and only IV Fluids manufacturing company to receive prestigious IDMA quality exporting award and is first and the only pharmaceutical health care company in India to receive ISO 9002 Certification by the Bureau Veritas Quality International, London. The petitioner also submitted its tender pursuant to NIT dated June-July, 2001 which is the subject matter of CWP No. 1435/2002. The petitioner's tender has been rejected on the ground that M/s. Core Healthcare Ltd. is a sick company and reference in this connection is pending before the Board of Industrial Financial Reconstruction and it is having become sick is a fact not disputed by the petitioner. However, what is argued is that the petitioner fulfillled at eligibility conditions as prescribed in Clause 13 of ITB and these were the only conditions which the petitioner was required to meet. It is also stated that the petitioner is earning profits. The submission is that reference of M/s. Core Healthcare Ltd. to BIFR is of no consequence and such extrinsic evidence cannot be looked into in terms of Clause 24.3 of ITB.

27. For similar reasons, argument of petitioner in CWP No. 3284/2002 is also of no consequence inasmuch as petitioner is the agent of manufacturing company and its capacity to perform the contract would depend upon the supply of material by M/s. Core Healthcare Ltd. The said company having become sick would therefore be a relevant consideration for the official respondents as official respondents have to ensure that if contract is awarded to company like the petitioner, it should be in a position to fulfill its contractual obligation by supplying the material within the stipulated period.

28. We make it clear that the petitioner cannot be treated as ineligible on this ground. The bid submitted by the petitioner is to be evaluated and while evaluating the said bid, this fact that its principal, namely, M/s. Core Healthcare Ltd. has become a sick company would be a relevant factor. However, while evaluating the matter from this angle, as and when petitioner submits its bid pursuant to another NIT issued by the respondents in future, the respondents shall take into consideration the stage at which proceedings before BIFR are pending and the orders passed therein in so far as they are relevant for the purpose of ascertaining whether this company would be in a position to make the supplies. The respondents shall also take into consideration the performance of M/s. Core Healthcare Ltd., notwithstanding its sickness as it is possible that the said company is able to revive and rehabilitate itself pursuant to efforts made by the BIFR and/or its creditors. Such and other relevant considerations should be kept in mind while evaluating the bid of this petitioner.

29. Subject to aforesaid observations, all these writ petitioner are dismissed.