M/S Shiv Enterprise vs The State Of Assam And 5 Ors
2025 Latest Caselaw 2408 Gua

Gauhati High Court

M/S Shiv Enterprise vs The State Of Assam And 5 Ors on 28 January, 2025

Author: Michael Zothankhuma

Bench: Michael Zothankhuma

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GAHC010075942024




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                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                        Case No. : WP(C)/2057/2024

         M/S SHIV ENTERPRISE
         A PROPRIETORSHIP FIRM HAVING ITS OFFICE AT L.N.B ROAD, NALBARI
         TOWN, WARD NO. 6, PO AND DIST NALBARI, ASSAM
         REPRESENTED BY ITS PROPRIETOR SRI DEBEN DAS, AGED ABOUT 56
         YEARS, S/O LATE JAMUNA DAS,
         RESIDENT OF NALBARI TOWN, WARD NO. 1, PO AND DIST NALBARI,
         ASSAM 781335



         VERSUS

         THE STATE OF ASSAM AND 5 ORS.
         REPRESENTED BY THE COMMISSIONER AND SECRETARY TO THE GOVT.
         OF ASSAM, HEALTH AND FAMILY WELFARE DEPARTMENT, DISPUR,
         GUWAHATI 781006

         2:THE COMMISSIONER AND SECRETARY
         TO THE GOVT. OF ASSAM
          MEDICAL EDUCATION AND RESEARCH DEPARTMENT
          DISPUR
          GUWAHATI 06

         3:THE DIRECTOR OF MEDICAL EDUCATION ASSAM
          SIX MILE
          KHANAPARA
          GUWAHATI 781022

         4:THE JOINT DIRECTOR OF HEALTH SERVICES
          NALBARI ASSAM 781335

         5:THE PRINCIPAL CUM CHIEF SUPERINTENDENT
          NALBARI MEDICAL COLLEGE AND HOSPITAL
          DAKHINGAON
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            NALBARI
            ASSAM 781350

            6:THE BID EVALUATION COMMITTEE
             NALBARI MEDICAL COLLEGE AND HOSPITAL DAKHINGAON
             NALBARI
            ASSAM 78135

                                       BEFORE
                   HON'BLE MR. JUSTICE MICHAEL ZOTHANKHUMA


Advocate for the petitioners   : Mr. D. Das, Sr.Adv.,
                                 Mr. H. K. Nath.
Advocate for the respondents   : Mr. B. Gogoi

Date of hearing                : 23.01.2025
Date of Judgment               : 28.01.2025


                           JUDGMENT AND ORDER (CAV)

1. Heard Mr. D. Das, learned Sr. Counsel, assisted by Mr. H. K. Nath, learned counsel for the petitioner as well as Mr. B. Gogoi, learned Standing Counsel, Health Department.

2. The petitioner has put to challenge the impugned order cancelling the NIT dated 07.12.2023, by which rates/ bids had been called for, from interested parties, for providing healthcare kitchen and dietary services to Nalbari Medical College & Hospital, Nalbari.

3. The petitioner's case is that subsequent to the selection process carried out pursuant to the NIT dated 07.12.2023, the petitioner was selected as the L1 bidder, having quoted the lowest rate of Rs.79.85/-, inclusive of 5% GST for one patient per day. Sri Ganesh Traders was L2 @ Rs.88.50/- with 18% GST.

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4. The petitioner's counsel submits that the NIT was cancelled on the basis of the unanimous decision taken by the Tender & Procurement Committee in it's meeting held on 07.12.2023, wherein it was held as follows:

"In compliance of the GeM direction while preceding with the tender process, it has been observed that the qualified LI & L2 bidders after Financial Evaluation as published in GeM portal. have quoted a very low rate of Rs 79.85 inclusive of 5% GST by L1 bidder and Rs 88.50 inclusive of 18% GST by L2 bidder, which will never meet the per patient per day expenditure as per the prescribed daily diet menu published along with the BID document in Page no 13 & 14.

Tender & Procurement committee conducted a local market survey and also assessed the dietary service provider's existing supply rates in different Medical Colleges of Assam and concluded that, providing daily hospital diet as per the prescribed daily diet menu is practically not feasible at the quoted base rates of Rs 75.85 by the L1 bidder and Rs 75.00 by L2 bidders.

Considering the above the nutritional requirements of the indoor patients as well as hospital authority's responsibility to mandatorily provide nutritious diet for proper recovery as per the prescribed diet menu total tender value was estimated i.e. minimum per patient per day rate of Rs 120.00.

Total tender value clearly reflects the approximate daily rate per patient, however it has been observed that such quoted low rate which is about half of the approximate estimated rate will compromise the food quality and the patients will be deprived of the prescribed diet.

In the interest of Patient care the Tender & Procurement committee decided to cancel the BID NO GEM/2023/B/4302955 dated 07-12-2023 in order to facilitate the process of retendering with required modification of quotable rate criteria in respect of participating bidders after necessary approval of the competent authority."

5. The petitioner's case is that in respect of the NIT dated 15.03.2024 issued for supply of healthcare kitchen and dietary services in relation to Fakhruddin Ali Ahmed Medical College and Hospital, Barpeta, Sri Ganesh Traders was selected as the successful tenderer at it's rate of Rs.73.50/- per patient per day. He also submits that the respondents have selected the successful tenderers for other Page No.# 4/10

Medical Colleges in other districts of Assam, especially Jorhat Medical College & Hospital and Lakhimpur Medical College, at more or less similar rates as quoted by the petitioner. He accordingly submits that there is no justification for cancelling the NIT when the items to be supplied in all the medical colleges are more or less the same.

6. The learned Sr. Counsel for the petitioner submits that if the State respondents were of the view that the petitioner's rates were too low, the respondents could have applied the provisions of the evaluation of offer for award of contract in terms of the NIT, by making a counter offer of the price quoted by the petitioner. However, the same was not done. He further submits that the present NIT does not have a base rate for the dietary items to be supplied by a contractor, though in some of the NITs, pertaining to other hospital, like Tezpur Medical College & Hospital, Tezpur, a base rate has been provided in the NIT. He also submits that the issue as to whether the dietary articles to be supplied by the petitioner are of the required quality or not, can always be checked every day by the authorities and the contract can always be cancelled along with punitive damages, if quality is not adhered to by the petitioner. A clause, protecting the interest of the State Government and the patients of the hospital can always be incorporated in the agreement to be signed between the parties. Further, there is a provision in the NIT for monitoring the quality of services to be provided by the petitioner and there is also a penalty clause which can be invoked, for not providing quality service.

7. Mr. B. Gogoi, the learned Standing Counsel for the Health Department, on the other hand, submits that this Court should not substitute it's view with the views taken by the Tender & Procurement Committee, with regard to the rates Page No.# 5/10

offered by the bidders, inasmuch as, the Tender & Procurement Committee of Fakhruddin Ali Ahmed Medical College and Hospital, Barpeta is constituted by different persons, vis-a-vis, the Tender Procurement & Committee of Fakhruddin Ali Ahmed Medical College and Hospital, Barpeta. Similarly, Jorhat Medical College & Hospital and Lakhimpur Medical College would also be having different Tender & Procurement Committees and the decision made by one committee of a particular college in respect of supply of dietary articles, cannot be equally applied to other institutions.

8. Mr. B. Gogoi, the learned Standing Counsel for the Health Department further submits that the petitioner has been supplying dietary articles to the Nalbari Medical College & Hospital, Nalbari for a few years @Rs.141.60/- per patient per day. As such, there was a reasonable apprehension on the part of the Tender & Procurement Committee that the rate quoted by the petitioner would compromise the quality of the supply of dietary articles, after the Tender & Procurement Committee had conducted local market survey and had assessed the dietary service providers' existing supply rates in different medical colleges of Assam.

9. Mr. B. Gogoi, learned Standing Counsel for the Health Department has submitted the list of different Medical Colleges of Assam, wherein the contractors are supplying dietary articles to the patients of those hospitals at the accepted rates, which are as follows:-

"1. GMCH Guwahati = Rs 167.56 (Inclusive GST)

2. TMCH Tezpur = Rs 130.00 (Excluding GST)

3. DMCH Diphu = Rs 115.50 (Inclusive GST)

4. SMCH, Silchar = Rs 135.00 (Excluding GST)

5. DMCH, Dhubri =Rs. 147.00 (inclusive GST) Page No.# 6/10

6.LMCH LAKHIMPUR = Rs. 142 (excluding GST)

7. AMCH, Dibrugarh = Rs. 120/- (excluding GST)

8. JMCH, Jorhat = Rs. 94/- (Fixed)

9. FAAMC, Barpeta = Rs. 73.50/- (inclusive GST)

10.NMCH, Nagaon = Rate not discovered till date,

11. NMCH Nalbari = Rate not discovered till date

12.Tinsukia = Rate not discovered till date

13. KMCH Kokrajhar = Rate not discovered till date"

10. Mr. B. Gogoi, learned Standing Counsel for the Health Department submits that as per the meeting minutes of the Tender & Procurement Committee, regarding the dietary services for Nalbari Medical College & Hospital, Nalbari, the Tender & Procurement Committee had conducted a local market survey and also assessed the dietary service provider's existing supply rates in different Medical College & Hospital of Assam and concluded that providing daily hospital dietary as per the rates quoted by the petitioner and by L2 bidder at Rs.75.85 and Rs.75 respectively were not practicable, inasmuch as, it was estimated that the minimum requirement per day per patient would be Rs. 120/-.

11. Mr. B. Gogoi, learned Standing Counsel for the Health Department further submits that in terms of the judgment of the Supreme Court in the case of Bharat Coking Coal Limited and others vs. AMR Dev Prabha and others, reported in (2020) 16 SCC 759 and in the case of Master Marine Services (P) Limited vs. Metcalfe & Hodgkingson (P) Ltd , reported in (2005) 6 SCC 138, all that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of tenders. If a decision for re-tendering is on account of a desire to get a better price, then the involvement of Article 14 of the Constitution is not made out. Further, the Page No.# 7/10

Government, being the guardian of the Finances of the State, it is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. He submits that the only issue that can be gone into is whether there has been any infirmity in the decision making process and whether the same was reasonable.

12. Mr. D. Das, learned Sr. Counsel, submits that the supply of dietary articles to the Nalbari College & Hospital, Nalbari, at the present rate of Rs. 141.60 per patient per day, is only a temporary engagement and the said rate had been made/fixed by the State respondents and the same was not an outcome of any tender process.

13 I have heard the learned counsels for the parties.

14. As can be seen from the pleadings and the submissions made by the learned counsels for the parties, the petitioner's bid for supplying dietary articles to Nalbari College & Hospital, Nalbari was Rs.79.85, inclusive of 5% of GST, per person per day. The rates fixed for supply of dietary articles for various other Medical Colleges & Hospitals in various districts of Assam show that the rates are different for different hospitals/colleges. In fact, the rates accepted by the State Government for Fakaruddin Ali Ahmed Medical College (FAAMC), Barpeta is only Rs.73.50, including GST, which is lower than the petitioner's bid. It is also an admitted fact that Barpeta and Nalbari district are neighbouring districts to each other. It is also an admitted fact that there has been no base price fixed by the respondent authorities, with regard to the rates for supply of dietary articles for Nalbari College & Hospital, Nalbari, as had been done in the tender Notice for Tezpur Medical College & Hospital, Tezpur.

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15. The reason for the Tender & Procurement Committee stating that the rate offered by the petitioner was not practicable/feasible, is due to a local market survey that had been conducted by the said Committee, which is reflected in the meeting minutes dated 07.12.2023. On requesting the counsel for the respondents to produce the local market survey report made by the Tender & Procurement Committee, which was the basis for not accepting the petitioner's rate, the counsel for the State respondents submits that there is no written local market survey report made by the Tender & Procurement Committee.

16. In view of the fact that the local market survey report was not made by the Tender & Procurement Committee, this Court is of the view that the decision making process, for finding the petitioner's rate to be un-practicable and not feasible, falls flat on its face.

17. In the case of Bharat Coking Coal Limited and others (supra) , the Supreme Court had held that all that participating bidders are entitled to is a fair, equal and non-discriminatory treatment in the matter of evaluation of tenders and that award of the contract is essentially a commercial transaction, which must be determined on the basis of consideration that are relevant to such commercial decision.

18. In the present case, the very basis for coming to a finding that the petitioner's rate was not practicable or feasible, has been made on the basis of a non-existent local market survey report. Further, when there has been an attempt to re-issue an NIT to get higher rates from bidders, the involvement of Article 14 comes into play. This is due to the fact that in the case of Master Marine Services (P) Limited (supra), the Supreme Court has held that if a prayer for re-bidding is on account of a desire to get a better price, then the Page No.# 9/10

involvement of Article 14 of the Constitution would not be made out. However, in the present case, the case of the State respondents is not to get a lower price but to get a higher price, which would involve higher expenditure on the part of the State respondents.

19. In the case Sterling Computers Ltd. Vs. M&N Publications Ltd., reported in (1993) 1 SCC 445, the Supreme Court has held that the Courts can certainly examine whether the decision making process was reasonable, rational or arbitrary.

20. This Court is of the view that when the responsibility to supply dietary articles at a specific rate has been made by a bidder, which, in this case, is higher than the rate accepted for FAAMC, Barpeta, the issue as to whether the dietary articles are of the required quality and quantity can always be checked by the respondent authorities. The patients and the hospital can always be safeguarded/ or protected by putting in place stringent conditions in the contract agreement to be executed between the parties, including termination of the contract, if the petitioner's services are not up to the desired quality. In fact, the tender conditions provide for monitoring the quality of the dietary articles to be supplied, including levying penalty for not meeting the dietary/service standards, which can always be invoked by the State respondents.

21. In view of the fact that the very basis for rejecting the petitioner's bid is non-existent, i.e., there is no market survey report, this Court is of the view that the decision of the respondents to cancel the entire tender process on that ground and to go for a re-tender is arbitrary and violative of Article 14 of the Constitution. The respondents are accordingly directed to award the contract in Page No.# 10/10

favour of the petitioner for providing healthcare kitchen and dietary services to the Nalbari College & Hospital, Nalbari, pursuant to the e-Tender dated 07.12.2023. Consequently, the decision of the respondent authorities dated 25.03.2024, cancelling the e-Tender dated 07.12.2024, is hereby set aside.

22. The writ petition is accordingly allowed.

JUDGE

Comparing Assistant