Emri Green Health Services (Formerly ... vs State Of Jharkhand
2024 Latest Caselaw 9797 Jhar

Jharkhand High Court

Emri Green Health Services (Formerly ... vs State Of Jharkhand on 3 October, 2024

Author: Sujit Narayan Prasad

Bench: Sujit Narayan Prasad

 IN THE HIGH COURT OF JHARKHAND AT RANCHI

               W.P. (C) No. 4831 of 2024
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1. EMRI Green Health Services (formerly known as GVK EMRI) having its registered office at Devar Yamzal Medchal Road, P.O.-Kompally, P.S.-Pet Basheerabad, District- Secunderabad-500078 (Telangana); through its authorised signatory Sri Bikram Chakraborty, aged about 43 years, son of Sri Nirmal Kumar Chakraborty, resident of 45/4/3, Vivekanand Sarani, Haltu, S.O.-Haltu, P.O.-Haltu, P.S.-Survey Park, District-Kolkata (West Bengal);

2. Bikram Chakraborty, aged about 43 years, son of Sri Nirmal Kumar Chakraborty, authorised signatory, EMRI Green Health Services, resident of 45/4/3, Vivekanand Sarani, Haltu, S.O.-Haltu, P.O.-Haltu, P.S.-Survey Park, District- Kolkata (West Bengal).

..........Petitioners

Versus

1. State of Jharkhand, through the Secretary, Department of Health, Medical Education & Family Welfare, Government of Jharkhand, Ground Floor, Nepal House, P.O. & P.S.-Doranda, District-Ranchi;

2. Secretary, Department of Health, Medical Education & Family Welfare, Government of Jharkhand, Ground Floor, Nepal House, P.O. & P.S.-Doranda, District- Ranchi;

3. Jharkhand Rural Health Mission Society, through its Mission Director, Department of Health, Medical Education & Family Welfare, Government of Jharkhand, GVI Campus, Namkum, P.O. & P.S.- Namkum, District-Ranchi;

4. Mission Director, Jharkhand Rural Health Mission Society, Department of Health, Medical Education & Family Welfare, Government of Jharkhand, GVI Campus, Namkum, P.O. & P.S.-Namkum, District- Ranchi.

              ...  ... ...            Respondents
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CORAM: HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD HON'BLE MR. JUSTICE ARUN KUMAR RAI

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For the Petitioner : Mr. Ashok Parija, Sr. Advocate [Through Virtual Mode] Ms. Nandini Gore, Adv Mr. Pandey Neeraj Rai, Adv Ms. Sonia Nigam, Adv Mr. Rohit Ranjan Sinha, Adv Ms. Swati Bhardwaj, Adv.

For the State : Mr. Rajiv Ranjan, Advocate General Mr. Piyush Chitresh, AC to AG

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CAV on 24/09/2024 Pronounced on 03/10/2024

Per Sujit Narayan Prasad, J:

Prayer:

1. The instant writ petition has been filed, under Article

226 of the Constitution of India, for the following reliefs:

A. commanding upon the Respondents to honor its

obligations/Conditions Precedents under Clause

4.1.2 of the Service Agreement dated 18.8.2023

(Annexure-4) by providing complete handover of the

full fleet of ambulances to the Petitioner No.1

marking the Commencement Date and further,

extend the Service Agreement dated 18.8.2023

(Annexure-4) for a further period of one (1) year in

favour of the Petitioner No.1 as per Clause 5 of the

Service Agreement;

B. directing the Respondents to cancel/withhold the

Letter No.9/RCH-288/2024-2008(RCH) dated

13.8.2024 (Annexure-21) issued by Respondent-

Jharkhand Rural Health Mission Society to the

Petitioner for floating new tender, being arbitrary

and issued without assigning any reasons;

C. quashing/canceling, with all consequences, the e-

tender Notice No.NHM/Nam/04/2024 dated

14.8.2024 (Annexure-24) published by the State of

Jharkhand i.e. Respondent-Jharkhand Rural

Health Mission Society on 16.8.2024, through

Jharkhand Rural Health Mission Society, Namkum,

Ranchi i.e. Respondent No.3, for Implementation,

Operation & Maintenance of "Emergency Medical

Ambulance Services ("EMAS")" in the State of

Jharkhand as arbitrary, non-transparent and writ

large with malafides inasmuch as it gives

unfettered power to the Respondents to not extend

the Service Agreement dated 18.8.2023 with the

Petitioner No.1 without any justification and/or

following procedure established by law.

Brief facts of the case:

2. The brief facts of the case, as per the pleadings

available on record, read as under:

3. The respondent-Department of Health, Medical

Education and Family Welfare through the respondent-

Jharkhand Rural Health Mission Society invited proposal

vide its Request for Proposal (RFP) through e-tender

Notice dated 03.05.2023, which was published by the

State of Jharkhand on its website on 06.05.2023 through

Jharkhand Rural Health Mission Society, Namkum,

Ranchi wherein bid for Implementation, Operation &

Maintenance of "Emergency Medical Ambulance services

["EMAS"] in the State of Jharkhand were called for.

4. The petitioner no. 1 participated in bid process and

after going through the tender process, he was declared

successful. Accordingly, the respondent-Department of

Health, Medical Education and Family Welfare through

the respondent-Jharkhand Rural Health Mission Society

issued Letter of Award dated 01.07.2023 in favour of the

petitioner no. 1, after declaring it as the successful bidder

in respect of e-tender dated 03.05.2023 to operate 543

Ambulances in different districts of Jharkhand. Pursuant

thereto, a Service Agreement dated 18.08.2023 was

executed between the respondent-Jharkhand Rural

Health Mission Society and Petitioner no. 1 to operate and

manage 108 EMAS in the State of Jharkhand.

5. It has been submitted that after entering into service

agreement, the petitioners vide letter dated 12.09.2023

submitted the handover/takeover Inspection Report with

gap analysis and requested for financial approval for the

EMAS, whereby it was intimated to the respondent no. 3-

Jharkhand Rural Health Mission Society that it had only

received only 278 ambulances out of 337 ambulances as

on date. In response thereto, the respondent no. 3-

Jharkhand Rural Health Mission Society replied to the

petitioners‟ vide letter dated 10.10.2023 that respondent

no. 3 has directed the previous service provider to hand

over 337ambulances within 5 days i.e., by 15.10.2023.

6. It has further been submitted that in the meeting

dated 7.11.2023 of the State Level Steering Committee,

which was constituted to supervise the EMAS, admitted

that the respondent no. 3 delayed in handing over of new

and old ambulances and therefore, decided to issue the

moratoriums to the petitioner no. 1 (i)a period of 90 days

from 18.08.2023 to 05.10.2023 and further (ii).a period of

90 days starting from 05.10.2023. Therefore, it is

admittance on the part of respondent no. 3 that there was

delay in handing over of new and old ambulances to the

petitioners.

7. It has further been submitted that the respondent

no. 3 asked the petitioner no. 1 to reply alleging non-

fulfillment of obligations by petitioner no. 1 under the

Service Agreement vide letter dated 24.04.2024, which the

petitioner no. 1 replied vide letter dated 30.04.2024

clarifying that the delay in implementation of the service

agreement is attributable solely to the delay in handover

of all 543 ambulances by respondent no. 3.

8. It has been contended that petitioner no. 1 wrote

letter dated 04.07.2024 and 29.07.2024 stating therein

that since the respondent no. 3 did not hand over 543

ambulances, which was a condition precedent for a period

of one year to be commence from the agreed date, as

termination of the agreement did not arise and further

requested for extension of the contract for a further period

of one year.

9. It has further been stated that as per service

agreement, the one-year period would come from the date

of complete hand over of 543 operational ambulances but

the same was not handed over but in the meantime, the

petitioner was communicated with letter dated

13.08.2024, whereby it was informed that the authorities

are starting the process to find a new service provided

and until the same is found, the petitioner no. 1 shall

continue with the contract. Pursuant thereto, on

16.08.2024, the respondents published e-tender notice

dated 14.08.2024 for bid for Implementation, Operation &

Maintenance of "Emergency Medical Ambulance services

["EMAS"].

10. Being aggrieved thereof, the petitioners have

approached this Court invoking the writ jurisdiction of

this Court conferred under Article 226 of the Constitution

of India, by filing the instant writ petition.

Submission on behalf of petitioners

11. Mr. Ashok Parija, learned senior counsel appearing

for the petitioners has submitted that the decision so

taken by the authority to go for the fresh tender is highly

arbitrary and illegal since the petitioners have already

made communications to the authorities concerned for

extension of the period of tender since all 543 ambulances

were not handed over to the petitioners.

12. It has been contended that the period of one year

will only be commenced after handing over of all 543

ambulances, as per the interpretation of date of initiation

of the commencement of work as defined under Clause

1.1 (xx) of the Service Agreement dated 18.08.2023,

whereby and whereunder the „commencement‟ date has

been defined that the „commencement date‟ shall mean on

which parties have completed their respective Conditions

Precedents and obligations or such condition(s) have been

waived by the concerned parties.

13. It has been submitted that it is evident from the

affidavit filed on behalf of the State, that altogether 543

ambulances (existing and new) were to be handed over as

per the condition stipulated under Clause 3.12.1, as per

timeline in Schedule 2, but all the 543 ambulances have

not been handed over rather only part thereof have been

handed over and 59 ambulances have been shown to be

put for repairing work. Therefore, argument has been

advanced that by taking note of the commencement date,

which would be as per the meaning giving under clause

1.1 (xx) of the Service Agreement that the commencement

date would be the date on which parties have completed

their respective Conditions Precedents and obligations or

such condition(s) have been waived by the concerned

parties. But the respondents-authorities, without taking

into consideration the aforesaid fact, has taken a decision

to go for the fresh tender which is nothing but in violation

of terms and conditions of the contract.

14. The argument has been advanced that by making

reference of clause 5.1 which contains a provision under

Clause 5.1.1 wherein it has been stated that subject to

the terms and conditions contained hereinafter, this

Contract unless otherwise terminated in accordance with

the provisions of Article 15 herein, shall remain valid and

in force for an initial period of 1 (one) year, which period

shall be reckoned from the commencement date (the

"Contract Period") and can be extended for a period of 1

(one) year at a time up to maximum of 5 (five) years,

subject to satisfactory performance of obligations by the

Service Provider. The ground therefore has been taken

even under clause 5.1.1 the terms of the contract, the

reference of the commencement date has been made and

as per the commencement date as defined under 1.1 (xx)

mean that the parties have completed their respective

conditions precedents.

15. Here, the terms and conditions which was to be

completed in between the parties was 543 ambulances for

which the work order has been issued as per clause

3.12.1 but even accepting the plea of the State that 543

ambulances have not been handed over then also it is

evident that the terms and conditions of the contract has

not been complied with. Hence, by taking the

commencement date as referred under clause 5.1.1 the

period is to be extended for a further of one year and

maximum for the period of five years but the State in

complete defiance of the said condition is now proceeding

to go for the fresh tender and as such the action of the

State is to be deprecated by passing appropriate order.

16. It has further been contended that various

representations have been filed before the authorities for

extension of the period since all 543 ambulances have not

been handed over as per the terms and conditions of the

contract but no decision has be taken.

17. The ground has also been taken by making reference

of minutes of meeting wherein the State itself has

admitted that due to delay in handing over the old and

new ambulances in fully operational condition the

moratorium be given for 90 days from the date of signing

of agreement which is nothing but a clear-cut admission

on the part of the State that due to delay caused in

handing over the ambulances the moratorium period is to

be given.

18. Argument has also been advanced by referring to the

impugned order wherein no reason has been assigned as

to why the State has taken decision to go for the fresh

tender even though the condition as stipulated in the

terms and conditions of the contract has not been

fulfilled.

19. The ground has been taken that the impugned order

since is without having any reason and as such the same

is in violation to the principles of natural justice as also in

absence of the reason the said order cannot be improved

by filing affidavit in view of the ratio laid down by Hon‟ble

Apex Court in the case of Mohindhr Singh Gill and Anr.

vs. Chief Election Commissioner, New Delhi and Ors.

[(1978)1 SCC 405]

20. The learned senior counsel for the petitioners has

relied upon the following judgments in order to impress

upon the Court that in a case where the arbitrary action

is being taken in the contractual matter, the High Court

under Article 226 of the Constitution of India is well to

interfere with.

(a) State of Uttar Pradesh Vs. Sudhir Kumar Singh

& Ors. (2021) 19 SCC 706

(b) Mahabir Auto Stores and others Vs. Indian Oil

Corporation and Ors. (1990) 3 SCC 752

Submission on behalf of State:

21. Learned Advocate General appearing for the State

has taken the following ground in making opposition to

the submission made on behalf of petitioners.

(i) Argument has been advanced by making reference of

the terms and conditions of the contract wherein as per

the State, the agreement has been decided to be valid for

a period of 12 months from the date of signing of the

same, which would be evident from the terms and

conditions of the contract.

(ii) Reference of Clause 4.2 has been made, which

speaks about damages for delay by the service provider. It

has been argued by putting reliance upon conditions

stipulated under Clause 4.2 of the Service Agreement that

in case there is delay in handing over by the service

provider then instead of seeking relief for renewal of the

contract period the damages can well be sought for by

making an application for the aforesaid.

(iii) The reference of arbitration clause has also been

made as available wherein it has been provided that in

case of any dispute with respect to interpretation

difference or objection whatsoever arising in connection or

arises out of the agreement or the meaning of part thereof

or on the rights, duties or liabilities of any party the same

shall be referred to the authority or the State level

screening committee for decision.

(iv) It has been contended that if the petitioners are

having any grievance in the nature of dispute, they can

well raise the dispute by invoking the arbitration clause

as stipulated under Clause 17.

(v) The learned Advocate General by making reference

of counter affidavits wherein it has been stated that it is

incorrect on the part of the petitioner that the date of

commencement of period of contract will only be initiated

when 543 ambulances will be handed over, rather, the

ambulances have been handed over, which would be

evident from the bills submitted by the petitioners, as

appended in the supplementary counter affidavit filed on

23.09.2024, which impliedly suggests that the terms and

conditions of the contract as per the agreement has

already been acted upon and from the date when it has

been acted upon the validity of the agreement will be for a

period of one year which will end on 17th August, 2024

since the agreement was signed on 18th August, 2023.

(vi) Argument has been advanced so far as the ground

taken on behalf of petitioners that the applications have

been made for extension of the period of contract but the

same cannot be said to be acceptable in view of the

conditions as contained under Clause 5.1 wherein the

reference of the terms of the contract has been given by

which it is evident that extension can be given for another

period of 12 months will be given only if application is be

filed along with satisfactory performance

recommendation.

(vii) Thereafter, the department will examine the

submission and shall request clarification for

completeness of submission in writing from Service

Provider, if any. But the petitioner has not given any

application for extension of time along with the

satisfactory performance recommendation, as such

whatever application has been filed which is being

referred herein, is not fit to be considered for extension of

contract, in view of specific condition as stipulated under

Clause 5.1 of the Service Agreement.

(viii) The argument has been advanced by making

reference of documents as appended with affidavit dated

23.09.2024 wherein the bills have been raised initially for

utilization of 466 ambulances which itself suggests that

the petitioner has already utilized the 466 ambulances as

also bills have been submitted therefore, it cannot be

disputed that the agreement has not been acted upon.

(ix) It has been submitted that the petitioner has raised

the bills from the month of August, 2023 onwards and for

the month of August, 2023 total 466 Ambulances were

deployed by the petitioner and accordingly bills have been

raised pertaining to deployment of 466 Ambulances, as

would be evident from Annexure A/1 to the

supplementary counter affidavit dated 23.09.2024.

(x) It has further been submitted that the summary

sheet of the hand over/take over of all he 337

Ambulances (existing) in favour of the petitioners stand

complete, as such the entire fleet of 543 (206 new and

337 existing) Ambulances is under control of the

petitioner as on date.

(xi) Learned counsel for the respondents-State has

further submitted that the request for extension of

contract received from the petitioner since is not

backed/supported by „satisfactory performance

recommendation‟, as such the request for extension of

contract in terms of clause 5.1.1 of the agreement has not

been acceded to.

22. Learned State counsel based upon the aforesaid

ground has submitted that the petitioner is having no

legal vested right for seeking extension of the contract

and as such it is a fit case where the writ petition is to

be dismissed.

Analysis

23. We have heard learned counsel for the parties and

gone across the pleadings made in the writ petition and

counter affidavits filed on behalf of the respondents as

also the documents available on record.

24. The core issue which requires consideration is as to

whether the case of the petitioner was fit to be considered

for extension of the period of contract.

25. The requirement for consideration of such issue is

the decision of the State-authorities in taking decision to

go for the new/fresh tender for the same purpose.

26. This Court, in order to answer the said issue, needs

to refer herein some relevant the terms and conditions of

the contract, which has got bearing for adjudication of the

lis.

27. The bid documents itself stipulates that the same

will be valid for a period of 12 months from the date of its

signing. For ready reference, the relevant part of the bid

document, as under Section 6: Terms and Conditions at

clause 4 is referred herein:

"Section 6: Terms and Conditions

4.Modification of agreement ....

The Agreement shall be valid for a period of 12 months from the date of signing of the same. The agreement can be further extended annually up to 60 months on mutual consent....."

28. It is evident therefrom that for the purpose of

modification of the agreement the period can be extended

annually up to 60 months but on mutual consent.

29. The definition of commencement date has been

defined under clause 1.1.(xx), which is being referred

herein:

1.(xx)."Commencement date" shall mean on which parties have completed their respective Conditions Precedents and obligations or such condition(s) have been waived by the concerned parties."

30. It is evident from the meaning of commencement

date, which shall mean on which parties have completed

their respective Conditions Precedents and obligations or

such condition(s) have been waived by the concerned

parties.

31. The reference of the clause 3.12 also needs to refer

herein, which stipulates with respect to handing over of

ambulances [existing and new]. A clause has been

inserted as under Clause 3.12.1 wherein it has been

stipulated that 543 Ambulances (existing and new) shall

be handed over as pre timelines in Schedule 2. The

authority will ensure and procure hand-back of

Ambulances from existing operator, handover/takeover to

new service provider. The handover, takeover and the

inspection of the existing vehicles shall be done jointly by

the Existing Service Provider. For ready reference, the

same is quoted as under:

"3.12.1 The 543 Ambulances (existing and new) shall be handed over as pre timelines in Schedule 2. The authority will ensure and procure hand-back of Ambulances from existing operator, handover/takeover to new service provider. The handover, takeover and the inspection of the existing vehicles shall be done jointly by the Existing Service Provider Provider, and the Authority through its representatives and accordingly sign the Inspection Report. If the Vehicles are not found in the proper equipped condition, the Authority shall reimburse the amount required for servicing (repairing/rectification/replacement) of the Vehicles and/or its parts to the New Service Provider.

32. The bearing in the clause 3.12.1 is that 543

ambulances, both are under existing and new one.

33. The conditions precedent has been referred under

clause 4.1 under „Conditions Precedent‟, wherein clause

4.1.2 stipulates that the Authority shall be obliged to

satisfy all of the Conditions Precedent set forth in this

Clause 4.1.2 within a period of 45 (forty five) days from

the date of signing of this Agreement. (a).The Authority

shall ensure that the Service Provider is granted access to

and handed over the existing Ambulances in accordance

with Clause 3.12. (b). The Authority shall ensure the

handover of the Existing Project Facilities in accordance

with Clause 7.2

34. For ready reference, relevant part of clause 4.1.2 is

quoted as under:

4.1 Conditions Precedent 4.1.1xxxXXX 4.1.2 The Authority shall be obliged to satisfy all of the Conditions Precedent set forth in this Clause 4.12 within a period of 45 (forty five) days from the date of signing of this Agreement.

(a) The Authority shall ensure that the Service Provider is granted access to and handed over the existing Ambulances in accordance with Clause 3.12:

(b) The Authority shall ensure the handover of the Existing Project Facilities in accordance with Clause 7.2

35. The clause 4.2 deals with the provision of damages

for delay by the Service provider.

36. The schedule 5.1 also needs to be refer herein,

wherein at Clause 5.1.1 it has been stated that subject to

the terms and conditions contained hereinafter, this

Contract unless otherwise terminated in accordance with

the provisions of Article 15 herein, shall remain valid and

in force for an initial period of 1 (one) year, which period

shall be reckoned from the commencement date (the

"Contract Period") and can be extended for a period of 1

(one) year at a time up to maximum of 5 (live) years,

subject to satisfactory performance of obligations by the

Service Provider. For ready reference, the same is quoted

as under:

5.1 Terms of the contract 5.1.1 Subject to the terms and conditions contained hereinafter, this Contract unless otherwise terminated in accordance with the provisions of Article 15 herein, shall remain valid and in force for an initial period of 1 (one) year, which period shall be reckoned from the commencement date (the "Contract Period") and can be extended for a period of 1 (one) year at a time up to maximum of 5 (live) years, subject to satisfactory performance of obligations by the Service ProviderBefore expiry of present contract period, at least one- month in advance from the due expiry date of contract, the Service Provider shall forward his submission with request to Authority / Department for extension of contract period for another period of 12 months along with satisfactory performance recommendations. Department shall examine the submission and shall request clarification for completeness of submission in writing from Service Provider, if any.

37. It is, thus, evident that the period of contract can be

extended for further period of 12 months but if such

application will be filed by the concerned party along with

the satisfactory performance recommendation, which

shall be examined by the department and shall request

clarification for completeness of submission in writing

from Service Provider, if any.

38. Clause 7.2 speaks with respect to 72 Existing Project

Facilities, which also finds mention at clause 4.1.2 (b),

wherein it has been stipulated the Authority, in

accordance with the terms and conditions set forth

herein, shall hand over the Existing Project Facilities to

the Service Provider, for the duration of the Contract

Period and, for the purposes permitted under this

Contract, and for no other purpose whatsoever. For ready

reference, the same is quoted as under:

7.2 Existing Project Facilities The Authority, in accordance with the terms and conditions set forth herein, shall hand over the Existing Project Facilities to the Service Provider, for the duration of the Contract Period and, for the purposes permitted under this Contract, and for no other purpose

whatsoever.

39. Section 6 of the Terms & Conditions contains a

Clause 12 wherein in case of dispute Arbitration has

been dealt with. For ready reference, the same is

quoted as under:

12. Arbitration

a) If case of any dispute with regard to the interpretation, difference or objection whatsoever arises in connection with or arises out of the agreement, or the meaning of any part thereof, or on the rights, duties, or liabilities of any party, the same shall be referred to the Authority or State Level Steering Committee (EMAS) for decision.

b) If dispute or difference of any kind shall arise between the Authority and the Service provider in connection with or relating to the Service Level Agreement, the parties shall make every effort to resolve the same amicably by mutual consultations, mediation, and Conciliation. If the parties fail to resolve their dispute or difference by such mutual consultations within thirty days of commencement of consultations, then either the Authority or the firm/contractor may give notice to the other party of its intention to commence arbitration, as hereinafter provided. The applicable arbitration procedure will be as per the Arbitration and Conciliation Act, 1996 of India. In that event, the dispute or difference shall be referred to the sole arbitrator to be mutually appointed by the parties. If the arbitrator to whom the matter is initially referred is transferred or vacates his office or is unable to act for any reason, he/she shall be replaced by another person mutually appointed by the parties to act as Arbitrator.

d).Work under the Service Level Agreement shall, notwithstanding the existence of any such dispute or difference, continue during arbitration proceedings and no payment due or payable by the Authority or the Service provider shall be withheld on account of such proceedings unless such payments are the direct subject of the arbitration.

e) Reference to arbitration shall be a condition precedent to any other action at law.

f).Venue of Arbitration: The venue of arbitration shall be at Ranchi, Jharkhand.

g)Language of Arbitration: The language of arbitration shall be English or Hindi."

40. Schedule 2 also needs to refer herein, which has

been referred under Clause 3.12 wherein it has been

stipulated that on the commencement date all the 543

Ambulances and other Project Facilities shall be over to

the Service Provider from the Existing Service Provider.

For ready reference, the Schedule 2 is quoted as under:

SCHEDULE 2-PROJECT PHASING ACTIVITIES Handover of existing Project Facilities

a) On the commencement date all the 543 Ambulances and other Project Facilities shall be over to the Service Provider from the Existing Service Provider.

(b) The Service Provider shall fully operationalize the CCC with minimum 30 seats as on the Commencement Date.

(c) The Service Provider shall ensure that there is no disruption in the services while taking over from the Existing Operator.

The Authority shall assist in taking over of the Project Facilities Any cisruption in the Services shall be treated as delay in commencement of Ambulance Services and Damages stated in Clause 1 (1) of Schedule 5 shall be levied on the Service Provider.

(d) The above timelines shall not be extended, except in case of Force Majeure Events. If any Force Majcure Events occurs and Service Provider requests the Authority for extension of time, giving reason for such request, the Authority may, at its sole discretion, agree to extend the timelines by a period for which effect of such Force Majeure Events subsists."

41. This Court, after having referred the various clauses

of the agreement, is of the view that dispute redressal

mechanism has also been provided by having an

arbitration clause as under Clause 12 of Section 6: Terms

& Conditioin, wherein reference of dispute has also been

made. Meaning thereby if in case any dispute between the

parties with respect to damages or any dispute of any

nature whatsoever the same can be agitated by invoking

the arbitration clause. Meaning thereby, in case of any

dispute with regard to the interpretation, difference or

objection whatsoever arises in connection with or arises

out of the agreement, or the meaning of any part thereof,

or on the rights, duties, or liabilities of any party, the

same shall be referred to the Authority or State Level

Steering Committee (EMAS) for decision.

42. Further, if dispute or difference arise between the

Authority and the Service provider in connection with or

relating to the Service Level Agreement, the parties shall

make every effort to resolve the same amicably by mutual

consultations, mediation, and Conciliation. If the parties

fail to resolve their dispute or difference by such mutual

consultations within thirty days of commencement of

consultations, then either the Authority or the

firm/contractor may give notice to the other party of its

intention to commence arbitration. The applicable

arbitration procedure will be as per the Arbitration and

Conciliation Act, 1996 of India. In that event, the dispute

or difference shall be referred to the sole arbitrator to be

mutually appointed by the parties.

43. Learned senior counsel for the petitioners has tried

to impress upon the Court that the issue of invoking the

arbitration clause will only be there if there is dispute but

according to affidavit filed on behalf of State when it is

admitted that 59 ambulances have not been supplied

which itself suggests that the State has admitted of not

handing over the ambulances in entirety to the extent of

543 which is essence of the terms of the contract as per

reference of 543 ambulances as under 3.12.1 of the

contract.

44. This Court, in order to appreciate the said argument

as to whether 543 ambulances if only be handed over to

back date the contract will be said to begin needs to refer

herein the provision of condition stipulated under clause

3.12.1, definition of commencement date as also one

another clause where the reference of 3.12.1 has been

made as under 4.1.2 (a) so far it relates to handing over

the ambulances are concerned.

45. There is no dispute in the fact of the case that the

date of commencement will be said to be the date when

the obligation in between the parties will be complied

with.

46. The reference of 543 ambulances have also been

made that also cannot be disputed if the condition

stipulated under clause 3.12.1 will be taken into

consideration but if the clause 3.12.1 the reference of

existing and new ambulances to the extent of 543

ambulances have been made.

47. This Court in the context of applicability of the

clause 3.12.1 wherein existing and new both have been

taken into consideration. While counting 543 ambulances

is require also to consider the condition stipulated clause

4.1.2 (a) wherein it has been provided that existing

ambulances is to be handed over in view of the condition

stipulated under clause no. 3.12. As such this Court is of

the view that the condition stipulated under clause no.

3.12 is not to be read in isolation rather it is to be read

together with the condition stipulated under clause

4.1.2(a).

48. If both the conditions will be taken together then the

reference of existing and new 543 ambulances will have to

be with respect to the handing over of the existing

ambulances both condition under 4.1.2(a). If both the

conditions is to be taken together due to specific reference

of the condition stipulated under clause 3.12 and 4.1.2

hence, the reference which is being made on behalf of

non-handing over the 59 ambulances whether is existing

or new it is not available in the entire pleading.

49. The petitioner since is trying to make out a case for

breach of the terms and conditions and as such it is the

bounden duty of the petitioners to come out with the

specific plea that the existing ambulances have also not

been supplied.

50. The affidavit, which has been filed on behalf of State

wherein it has been state that 337 ambulances have

already been handed over which is being said to be

existing one in addition thereto, 206 ambulances, which

have been said to be new the total comes to 543

ambulances.

51. The number of existing and new ambulances to the

extent of 337 and 206 respectively has not been disputed.

52. Out of 543 ambulances, as would appear from the

affidavit filed by the State that 59 ambulances have not

been handed over reason has been shown that they are

under repairing work.

53. The question, which is being raised on behalf of the

petitioners that all 543 ambulances will be handed over

from the date the agreement will be said to be acted upon,

this Court is of the view that such argument is not fit to

be accepted reason being that when the petitioners have

already signed the agreement and as per the clause as

under General Terms & conditions wherein the agreement

period will commence from the date of agreement which

will be for a period 12 months meaning thereby the

agreement will be set at motion when it will be signed.

Further it is also not the case that none of the

ambulances have been handed over to the petitioners

rather, the petitioners have also entered in exercise of

handing over of the ambulances from the erstwhile service

provider.

54. It cannot also be the case of the petitioner that none

of the ambulances have been supplied rather the

ambulances have been supplied, the service has been

provided by the petitioner in the capacity of service

provider and to that effect bills have been submitted of

466 ambulances, as would appear from Annexure A/1 to

the supplementary counter affidavit, which itself goes to

suggest the petitioners on the first instance has

submitted 466 ambulances out of 543 ambulances

existing and new. Existing ambulances since have been

supplied and service has also been set at motion and

hence, it is not available for the petitioners to take the

ground that unless all the 543 ambulances will be

supplied the date of agreement will be said to be

commenced otherwise the consequence would be that

suppose one of the ambulances has gone garage for

repairing work, out of 543 ambulances and after

substantial delay if the ambulance will be given after

getting repaired over then the agreement will commence

the same cannot be said to be acceptable further for the

reason that the same can be taken by way of another

example that if in such circumstance 542 ambulances

have been operated but one ambulance has not been

handed over due to some mechanical reason and it is

handed over after 3-4 months, then the period of

agreement will be said to commence from the date when

the rest one ambulance will be handed over to the

petitioners giving apart 542 ambulances. Such

acceptance will be improper and as such the same cannot

be accepted.

55. The things, which is to be considered, is based upon

the terms & conditions of the contract wherein the

petitioners have accepted the terms & conditions and if

terms & conditions as stipulated under clause 3.12 will

be read together 4.1.2(a) then it cannot be said that the

period of agreement will begin when the entire ambulance

will be handed over in favour of the petitioner.

56. Learned senior counsel for the petitioners has

submitted that the issue of non-handing over of

ambulances have been ventilated by various

representations for the purpose of extending the period

thereof but this Court is of the view that merely by

making an application for extension is not sufficient

rather the clause for extension is there wherein it has

been stipulated that period of agreement can be extended

for another period of 12 months subject to application to

be accompanied with the satisfactory performance

recommendation.

57. This Court has examined the pleading as also the

documents appended thereto wherefrom it is evident that

there is no satisfactory performance recommendation and

as such authority has not given any consideration with

respect to the extension of the said period as is being

claimed by the petitioner that no decision has been taken.

58. The law is well settled that any decision can be

taken by the authority in contractual matter depending

upon the terms and conditions of the contract.

59. The matter would have been different if such

application would have been filed on the basis of

satisfactory performance recommendation and even

thereafter the decision has not been taken then the

matter can be said to be understandable.

60. So far as the satisfactory performance

recommendation is concerned, the State has come out

with the stand in the affidavit filed on 23.09.2024 that the

service of the writ petitioner as a service provider cannot

be said to be satisfactory for which certain instances has

been given based upon the enquiry conducted by the

State in order to come to the independent decision as

would appear from the statement made in the

supplementary counter affidavit.

61. Therefore, this Court is of the view that so far as the

issue of satisfactory performance recommendation is

concerned, the stand which has been taken in the

supplementary counter affidavit dated 23.09.2024 there

is no rebuttal reply as such this Court has to accept what

has been pleaded in the counter affidavit.

62. We have considered the judgments upon which

reliance has been placed by the learned counsel for the

petitioner and found therefrom that ratio has been laid

down that regarding the power which has to be exercised

by the High Court under Article 226 of the Constitution of

India in tender matter.

63. We are not disputing the aforesaid ratio since it is

the law settled that in case of arbitrary or decision has

been taken based upon the irrationality, the High Court

can exercise the power conferred under Article 226 of the

Constitution of India, in addition to the aforesaid

judgments the reference of these judgments have also

been made.

64. In Master Marine Services (P) Ltd. v. Metcalfe &

Hodgkinson (P) Ltd., (2005) 6 SCC 138 the Hon‟ble Apex

Court has observed that while exercising power of judicial

review in respect of contracts, the court should concern

itself primarily with the question, whether there has been

any infirmity in the decision-making process. By way of

judicial review, the court cannot examine details of terms

of contract which have been entered into by public bodies

or the State.

65. In the case of Jagdish Mandal Vrs. State of

Orissa & Ors. [(2007) 14 SCC 517], it has been laid

down by the Hon‟ble Apex Court that the power of judicial

review in the contractual matters is permissible only if, (I)

the process adopted or decision made is mala fide or

intended to favour someone or the same is so arbitrary

and irrational that the court can say: „the decision is such

that no responsible authority acting reasonably and in

accordance with law could have reached.‟ (II) public

interest is affected.

66. For ready reference, the relevant paragraph of the

aforesaid judgment is being quoted as under:-

"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up

public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold."

67. In the case of Michigan Rubber (India) Ltd. v.

State of Karnataka (2012) 8 SCC 216] the Hon‟ble

Apex Court has observed that if the State or its

instrumentalities acted reasonably, fairly and in public

interest in awarding contract, interference by court would

be very restrictive since no person could claim

fundamental right to carry on business with the

Government. Therefore, the courts would not normally

interfere in policy decisions and in matters challenging

award of contract by the State or public authorities.

68. Further, the Hon‟ble Apex Court in the case of

Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn.

Ltd. (2016) 16 SCC 818 has held that a mere

disagreement with the decision-making process or the

decision of the administrative authority is no reason for a

constitutional court to interfere. The threshold of mala

fides, intention to favour someone or arbitrariness,

irrationality or perversity must be met before the

constitutional court interferes with the decision-making

process or the decision.

69. The Hon‟ble Apex Court in the case of Silppi

Constructions Contractors v. Union of India and Ors.,

2019 SCC OnLine SC 1133 has categorically observed

that the Court must realize that the authority floating the

tender is the best judge of its requirements and, therefore,

the court's interference should be minimal. The authority

which floats the contract or tender and has authored the

tender documents is the best judge as to how the

documents have to be interpreted, for ready reference, the

relevant paragraph is being quoted as under:

"20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."

70. After going through the judgments as referred

hereinabove, it is evident that interference by the Court

exercising the power under Article 226 of the Constitution

of India is only if the decision-making process of the

authority suffers from propriety by hitting the principle

laid down under Article 14 of the Constitution of India.

71. Learned senior counsel has also raised the issue of

propriety of the decision taken by the authority which has

been impugned on the ground there is no reason assigned

therein. It has been contended that in absence of any

reason the same cannot be allowed to be developed in the

counter affidavit.

72. We have considered the impugned order and found

therefrom that the same is only the communication to the

petitioner after completion of 12 months for allowing the

petitioner to carry out the contractual work till the tender

is being finalized.

73. There is no dispute about the settled position of law

that the reason is the soul of the order and further the

reason cannot be allowed to be improved by way of an

affidavit.

74. The same has been settled by Hon‟ble Apex Court in

the case of Mohindhr Singh Gill and Anr. vs. Chief

Election Commissioner, New Delhi and Ors (supra) .

75. We, on consideration of the aforesaid submission

and the settled position of law and considering the

content of the impugned order wherefrom it is evident

that the decision has already been taken on completion of

period of one year i.e, the period of contract

communicating the petitioner to carry out the contractual

work as per the agreement till the new tender is finalized,

are of the view that where is the reason so warranted

since the petitioner is well conscious that the period of

agreement is only 12 months and the same can be

extended subject to consideration of satisfactory

performance recommendation. But no such application

for extension for further period of 12 months has been

made along with the satisfactory performance

recommendation. As such said order cannot be said to

cause any prejudice to the petitioners in view of the fact

that the terms and conditions was known to the

petitioners regarding the validity of contract i.e., for 12

months and so far as issue of extension is concerned,

therefore, the extension cannot be claimed as a matter of

right rather it is totally on consideration of the authority

depending upon certain conditions and herein the

condition has been stipulated under clause 5.1.

76. This Court considering the aforesaid fact is of the

view that the petitioners have failed to satisfy this Court

with respect to decision said to be taken based upon the

irrationality or discussions made hereinabove that the

decision of the authority cannot be said to suffer from vice

of arbitrariness.

77. This Court, therefore, is of the view, based upon the

law laid down by Hon‟ble Apex Court as referred herein

above that power under Article 226 of the Constitution of

India can only be exercised if the decision so taken is

based upon the irrationality or it suffers from

arbitrariness but we have not found any irrationality or

the vice of arbitrariness by the respondents.

78. Therefore, this Court is of the view that it is not a

case where the extra-ordinary power conferred to this

Court under Article 226 of the Constitution of India can

be exercised by passing positive direction.

79. Accordingly, the instant writ petition sans merit is

dismissed.

80. Pending Interlocutory Application, if any, stand

disposed of.

            I Agree                                  (Sujit Narayan Prasad, J.)


      (Arun Kumar Rai, J.)
                                                        (Arun Kumar Rai, J.)
Alankar/-
A.F.R