Karnataka High Court

Philips India Limited vs State Of Karnataka on 7 July, 2022

Bench: Acting Chief Justice, J.M.Khazi

                         1



 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 7TH DAY OF JULY 2022

                     PRESENT

           THE HON'BLE MR. ALOK ARADHE
               ACTING CHIEF JUSTICE

                        AND

        THE HON'BLE MS.JUSTICE J.M. KHAZI

            W.A. NO.557 OF 2022 (GM-TEN)
                         IN
            W.P.No.8360 OF 2022 (GM-TEN)

BETWEEN:

PHILIPS INDIA LIMITED
A COMPANY WITHIN THE MEANING
OF COMPANIES ACT 2013
HAVING ITS REGISTERED OFFICE
AT 3RD FLOOR, TOWER A
DLF IT PARK, 08 BLOCK AF
MAJOR ARTERIAL ROAD
NEW TOWN (RAJARHAT)
KOLKATA, WEST BENGAL-700156.

CORPORATE OFFICE AT
UNIT 402, 4TH FLOOR, TOWER 3
WORLDMARK, SECTOR 65
MAIDAWAS ROAD, GURUGRAM
HARYANA-122018.

REPRESENTED BY ITS AUTHORISED REPRESENTATIVE
AND ACCOUNT MANAGER SOUTH
MR. NAGRAJ KAMAT
AGED ABOUT 43 YEARS.
                                    ... APPELLANT
                           2



(BY MR. SAJAN POOVAYYA, SR. COUNSEL., FOR
    MR. MANU PRABHAKAR KULKARNI, ADV.,)

AND:

1.     STATE OF KARNATAKA
       DEPARTMENT OF HEALTH AND FAMIL WELFARE
       MEDICAL EDUCATION
       M S BUILDING, AMBEDKAR VEEDHI
       BENGALURU-560001
       REPRESENTED BY THE PRINCIPAL SECRETARY.

2.     DIRECTORATE OF MEDICAL EDUCATION
       GOVERNMENT OF KARNATAKA
       ANAND RAO CIRCLE
       BENGALURU-560009
       REPRESENTED BY THE DIRECTOR
       OF MEDICAL EDUCATION.

3.     UNION OF INDIA
       MINISTRY OF FINANCE
       DEPARTMENT OF EXPENDITURE
       PROCUREMENT POLICY DIVISION
       NO.264-C, NORTH BLOCK
       NEW DELHI-110001
       REPRESENTED BY THE UNION (EXPENDITURE).

4.     FORESS HEALTHCARE LLP
       A LIMITED PARTNERSHIP
       REGISTERED UNDER THE LLP ACT, 2008
       HAVING ITS REIGSTERED OFFICE
       AT NO.2102/A, 24TH CROSS
       5TH A MAIN ROAD, BSK 2ND STAGE
       BENGALURU-560070
       REPRESENTED BY DESIGNATED PARTNER
       MR. SURESH JAYARAM.

5.     SHANGHAI UNITED IMAGING HEALTHCARE CO., LTD.
       A COMPANY INCORPORATED UNDER
       THE LAWS OF THE PEOPLES
       REPUBLIC OF CHINA
                              3



     HAVING ITS REGISTERED OFFICE
     AT NO.2258, CHENGBEI ROAD
     JIADING DISTRICT
     SHANGHAI 201/07, CHINA
     REPRESENTED BY ITS CHAIRMAN
     AND CEO MR. XUE MIN.

6.   WIPRO GE HEALTHCARE PRIVATE LIMITED
     A COMPANY INCORPORATED
     UNDER THE COMPANIES ACT, 1956
     HAVING ITS REGISTERED OFFICE AT NO.4
     KADUGODI INDUSTRIAL AREA
     WHITEFIELD, BENGALURU
     KARNATAKA-560067
     REPRESENTED BY MANAGING DIRECTOR.

                                     ... RESPONDENTS

(BY MR. DHYAN CHINNAPPA, AAG A/W
    MR. VIJAYKUMAR A. PATIL, AGA FOR R1 & R2
    MR. SHANTHIBHUSHAN, ASG FOR R3
    MR. R.V.S. NAIK, SR. COUNSEL FOR
    MR. NITHIN PRASAD, ADV., FOR C/R4)

                            ---

     THIS   WRIT   APPEAL    IS   FILED   U/S   4   OF   THE
KARNATAKA HIGH COURT ACT, PRAYING TO SET ASIDE THE
IMPUGNED ORDER DATED 28/06/2022, PASSED BY THE
LEARNED SINGLE JUDGE IN WP NO.8360/2022 (GM-TEN)
FILED BY THE APPELLANT, AND CONSEQUENTLY ALLOW WP
NO.8360/2022   (GM-TEN).     PASS   ANY SUCH FURTHER
ORDERS.


     THIS W.A. COMING ON FOR ORDERS, THIS DAY,
ACTING CHIEF JUSTICE DELIVERED THE FOLLOWING:
                             4



                      JUDGMENT

This intra-court appeal takes an exception to

order dated 28.06.2022 passed by the learned Single

Judge, by which writ petition preferred by the

appellant has been disposed of with the direction to

the appellate authority to decide the appeal preferred

by the appellant within a period of four weeks from

30.06.2022. The learned Single Judge has further

directed that interim order dated 05.04.2022 passed

in W.A.No.400/2022 shall continue till disposal of the

appeal by the appellate authority. In order to

appreciate the grievance of the appellant, few facts

need mention, which are stated infra.

2. The appellant is a Health Technology

Company, whereas, respondent No.4 is a Limited

Liability Partnership registered under Limited Liability

Partnership Act, 2008. Respondent No.5 is a company

incorporated under the Laws of the People's Republic

of China and Respondent No.6 is a company

incorporated in India. The Director of Medical

Education (hereinafter referred to as 'DME' for short)

floated following two tenders namely:

a. for supply and installation of 3.0 Tesla MRI and 128 Slice CT Scanners to Medical colleges/ hospitals (TENDER No.75) dated 10.02.2022 b. for supply installation of 1.5 Tesla MRI and 128 Slice CT Scanners to Medical colleges/ hospitals (TENDER No. 46) dated 20.12.2021

The aforesaid tenders were invited under two bid

system. A pre-bid meeting was held on 15.02.2022

and 23.12.2021 respectively and the terms of the

aforesaid tenders were amended.

3. The appellant sent a communication dated

11.02.2022 to the DME and pointed out some

discrepancies in the bids of submitted by Respondent

No.4 and 5. However, the aforesaid communication

failed to evoke any response. The appellant thereupon,

filed an appeal on 09.03.2022 before the appellate

authority under Section 16 of Karnataka

Transparency in Public Procurement Act, 1999

(hereinafter referred to as 'the Act' for short). The

appellant thereafter filed applications seeking stay of

all further tender proceedings on 24.03.2022.

4. The Principal Secretary to the Government of

Karnataka, Health and Family Welfare Department

(hereinafter referred to as 'the Appellate Authority' for

short) issued notices dated 19.03.2022 and

28.03.2022 by which the date of hearing was fixed on

05.04.2022 which was deferred to 06.04.2022.

Thereafter on 06.04.2022, the date of hearing fixed for

27.04.2022. It is the case of the appellant that notice

dated 08.04.2022 was not served on respondent No.6.

It is also averred that during the course of hearing,

the appellate authority indicted that the application

for stay has been rejected. However, the copy of the

order was not provided to the appellant. It was

averred in the writ petition that the appellate remedy

as therefore, rendered illusory and contrary to

principles of natural justice.

5. It is averred that the appellant on

13.04.2022 learnt that in another matter viz., a public

interest litigation, a division bench of this court had

recorded the statement of Additional Advocate General

about upgradation DIMHANS as higher psychiatry

Center. An affidavit was filed on 04.03.2022 stating

that MRI machine has been delivered to DIMHANS

and the same shall be fully operational from

20.04.2022.

6. The appellant therefore, filed a writ petition

on 16.04.2022 stating that the remedy of prosecuting

an appeal under Section 16 of the Act has been

rendered illusory and inefficacious. The appellant

therefore, sought quashment of tender No.46 and

Tender No.75. The appellant also sought the relief of

setting aside the award of tender in favour of

respondent No.5 as an agent of respondent No.5 for

supply and installation of two 1.5 MRI machines on

turn key basis for DIMHANS hospital. The learned

Single Judge passed an interim order on 19.04.2022

recorded the submission made by learned Additional

Government Advocate that pursuant to award of

tender to respondent No.4, respondent No.4 has

already executed the work and CT scanners have been

installed.

7. Against the aforesaid order, a writ appeal

viz., W.A.No.400/2022 was filed. In the aforesaid writ

appeal, an interim order was granted on 05.05.2022.

The aforesaid intra-court appeal was disposed of by

division bench of this court vide judgment dated

16.06.2022 and the learned Single Judge was

requested to decide the writ petition, until then, the

interim order dated 05.05.2022 was made operative.

8. The learned Single Judge by an order dated

28.06.2022 disposed of the writ petition with a

direction to the appellate authority to decide the

appeal preferred by the appellant within a period of

four weeks from 30.06.2022. The interim order dated

05.05.2022 was made operative till disposal of the

appeal. In the aforesaid factual background, this

appeal has been filed.

9. Learned Senior counsel for the appellant

submitted that the statutory remedy under Section 16

of the Act had been rendered inefficacious and

illusory. It is further submitted that in view of the

affidavit dated 04.03.2022 sworn by the appellate

authority, the appellate authority was incapacitated to

adjudicate the issue in appeal preferred by the

appellant on account of official bias. It is further

submitted that the appellate authority, which had

implemented a part of the order could not be expected

to decide the issue in a fair and in a impartial

manner. It is contended that learned single Judge

erred in holding that the apprehension of the

appellant about the official bias is without any basis.

It is urged that the State Government be directed to

nominate any other officer in place of the appellate

authority to adjudicate the appeal preferred by the

appellant. In support of aforesaid submission, reliance

has been placed on decisions in 'MANAK LAL VS.

PREM CHAND SINGHVI AND OTHERS', AIR 1957 SC

425.

10. On the other hand, learned Additional

Advocate General has submitted that the appellant's

apprehension about lack of impartiality and official

bias is unfounded. It is further submitted that no

question of bias is involved in adjudicatory process

before the appellate authority.

11. Learned Senior counsel for respondent No.4

while inviting the attention of this court to averments

made in the writ petition has contended that the issue

of official bias has been raised on untenable grounds.

It is submitted that the allegation of official bias is

wholly misplaced. In support of aforesaid submission,

reliance has been placed on decision in

'H.C.NARAYANAPPA AND OTHERS VS. STATE OF

MYSORE AND OTHERS', AIR 1960 SC 1073 and

'A.K.KRAIPAK AND OTHERS VS. UNION OF INDIA

AND OTHERS', (1969) 2 SCC 262.

12. We have considered the rival submissions

made on both sides and have perused the record. In

an adjudicatory proceeding under an Act, an appellate

authority will usually be administration itself when an

Administrator acts as an adjudicatory authority in a

dispute between his Department and a private party,

he may have some official bias towards the

Department. The Supreme Court in 'P.D.DINAKARAN

VS. HON'BLE JUDGES INQUIRY COMMITTEE',

(2011) 8 SCC 380 after taking note of the judgments

of the foreign courts as well as various High Courts of

the country, summed up the principles of bias by

applying the test of real likelihood from the point of a

fair minded informed observer. Para 71 of the

aforesaid judgment is reproduced below for the facility

of reference:

71. The principles which emerge from the aforesaid decisions are that no man can be a Judge in his own cause and justice should not only be done, but manifestly be seen to be done. Scales

should not only be held even but it must not be seen to be inclined. A person having interest in the subject matter of cause is precluded from acting as a Judge. To disqualify a person from adjudicating on the ground of interest in the subject matter of lis, the test of real likelihood of the bias is to be applied. In other words, one has to enquire as to whether there is real danger of bias on the part of the person against whom such apprehension is expressed in the sense that he might favour or disfavour a party. In each case, the Court has to consider whether a fair minded and informed person, having considered all the facts would reasonably apprehend that the Judge would not act impartially. To put it differently, the test would be whether a reasonably intelligent man fully apprised of all the facts would have a serious apprehension of bias. In cases of non-pecuniary bias, the `real likelihood' test has been preferred over the `reasonable suspicion' test and the Courts

have consistently held that in deciding the question of bias one has to take into consideration human probabilities and ordinary course of human conduct. We may add that real likelihood of bias should appear not only from the materials ascertained by the complaining party, but also from such other facts which it could have readily ascertained and easily verified by making reasonable inquiries.

Thus, it is evident that the issue of official bias

has to be determined on the touchstone whether there

is a real danger of bias on the part of a person against

whom such apprehension is expressed in the sense

that he might favour or disfavour a party. The

aforesaid issue has to be determined with reference to

the facts of each case.

13. In 'J.Y.KONDALA RAO VS. A.P.STATE

ROAD TRASNPORT CORPORATION, AIR 1961 SC

82, the Supreme Court while referring to decision of

the Supreme Court in 'S.C.NARAYANAPPA VS.

STATE OF MYSORE, AIR 1960 SC 1073 quoted

relevant extract of judgment, which reads as under:

14. Then this Court proceeded to state that the provisions of the Act did not sanction any dereliction of the principles of natural justice, for the Act visualized in case of conflict between the undertaking and the operators of private buses that the State Government should sit in judgment and resolve the conflict. Much to the same effect has been stated by Shah, J., in Petn. No. 2 of 1960, D/- 28-4-1960: (AIR 1960 SC 1073), though in slightly different phraseology. The learned Judge stated:

"It is also true that the Government on whom the duty to decide the dispute rests, is substantially a party to the dispute but if the Government or the authority to whom the power is delegated acts judicially in approving or modifying the scheme, the approval or modification is not open to challenge on a presumption of

bias. The Minister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capacity and unless there is reliable evidence to show that he is biased, his decision will not be liable to be called in question, merely because he is a limb of the Government."

Thus, it is evident that there has to be reliable

evidence to indicate that the authority adjudicating

the objection is biased and the decision cannot be

questioned merely because the officer is a limb of the

Government.

14. Now we may advert to the facts of the case

in hand. In the instant case, on the basis of direction

issued by Supreme Court dated 05.09.1995 issued in

case of 'SHEELA BARSE VS. UNION OF INDIA AND

OTHERS', (1995) 5 SCC 654, relating to treatment to

be given to mentally ill people, suo motu Public

Interest Litigation was registered even before issuance

of tenders i.e., on 15.02.2022 and 23.12.2021. A

division bench of this court had issued directions

contained in the order dated 05.03.2020. The said

order reads as under:

A memo dated 5th March 2020 is taken on record. It corrects the factual statements made on page 2 of the memo dated 27th February 2020. It is an accepted position that the Dharwad Institute of Mental Health and Neurosciences (for short 'DIMHANS') does not have a CT scan machine. Moreover the post of a Medical Superintendent at DIMHANS is vacant for a considerable time. We direct the State Government to take immediate steps for procuring a MRI machine of requisite specifications for the use of DIMHANS. We grant time of six weeks to the State Government to provide a MRI machine of requisite specifications to DIMHANS. The post of Medical Superintendent in an important institution

like DIMHANS cannot be kept vacant. We, therefore, direct the State Government to take all possible steps and ensure that the post is filled in within a period of three months from today. The memo dated 27th February 2020 states that the painting and renovation of DIMHANS is in progress and is hearly in completion. It is further stated that a day care centre for mentally ill persons has been started and is functioning at full strength. The work of painting and renovation of the hospital has to be completed immediately and preferably within a period of one month from today. The State will place on record the details of the patients to whom the benefit of day care centre has been provided. It must be also placed on record whether adequate staff is available to manage the day care centre and what is the nature of facilities available in the day care centre. On or before 17th April 2020, the State Government will file a report setting out the completion of work of

painting and renovation of the hospital and all details regarding day care centre as stated above. The progress made in appointing the Medical Superintendent and procuring a MRI scan machine shall be also placed on record. A copy of the Government Order dated 6th September 2013 is taken on record. For considering the report which shall be filed on or before 17th April 2020, the petition shall be listed under the caption of Orders on 20th April 2020.

Thereafter, on 04.03.2022 the Principal

Secretary, Health and Family Welfare Department

filed an affidavit on 04.03.2022 stating that MRI

machine has been delivered to DIMHANS and the

same shall be fully operational from 20.04.2022.

Thus, the appellate authority has complied with the

direction issued by this Hon'ble Court and has

ensured supply of one MRI machine out of total of 3

tesla MRI, 1.5 tesla MRI and 128 CT Scanners each

which had been tendered.

15. The appellate authority has in the aforesaid

process of ensuring compliance with the orders of this