2022 Supreme(Kar) 486
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
M/s Transasia Bio-Medicals Ltd. – Petitioner
Versus
Principal Secretary Department of Health and Family Welfare, Bengaluru – Respondent
Writ Petition No. 23192 of 2022
Decided On : 12-12-2022
Subject
Public Procurement - Tender Dispute
Act Referred
Headnote
Tender - Public Procurement - Karnataka Transparency in Public Procurements Act, 1999 - Section 16 - [TENDER] - [PUBLIC PROCUREMENT] - [Karnataka Transparency in Public Procurements Act, 1999 - Section 16] - The court discussed the specifications in the tender, the price quoted by the successful bidder, and the delay in the appeal process. It held that the specifications were not contrary to industry norms, the price quoted was not exorbitant, and the delay in the appeal process was contrary to public interest.
Fact of the Case:
The petitioner, a leading diagnostic company, challenged the notice inviting tender for procurement of diagnostic equipment, alleging that the specifications were tailored to favor the successful bidder and that the quoted price would result in loss to the exchequer. The appeal process was delayed, stalling the execution of the contract.
Finding of the Court:
The court found that the specifications were acceptable, the quoted price was not exorbitant, and the delay in the appeal process was contrary to public interest.
Issues: The issues included the acceptability of tender specifications, the quoted price, and the delay in the appeal process.
Ratio Decidendi: The court held that the tender specifications were acceptable, the quoted price was not exorbitant, and the delay in the appeal process was contrary to public interest.
Final Decision: The writ petition was dismissed with costs payable by the petitioner to the Karnataka State Legal Services Authority. The State was allowed to proceed with the contract execution if stalled due to the petition.
Advocate Appeared:
For the Petitioner: Nataraja Ballal.
For the Respondents: B.V. Krishan, Gangadhar R. Gurumath, Raviraj Malali.
ORDER :
1. The petitioner is before this Court calling in question order dated 09-11-2022 by which the Appellate Authority rejects the appeal filed by the petitioner and also calls in question the notice inviting tender dated 23-09-2020.
2. Brief facts that lead the petitioner to this Court in the subject petition, as borne out from the pleadings, are as follows:
The petitioner is M/s Transasia Bio-Medicals Limited (hereinafter referred to as ‘the Company’ for short). The Company claims to be incorporated under the provisions of the Companies Act, 1956 and is a leading diagnostic Company since 1985. The Company further claims to be India’s largest In-vitro Diagnostic Company offering solutions and products in Biochemistry, Hematology, Coagulation, ESR, Immunology, Urinalysis and other incidental diagnostic tests. It is a Multi-National Company with the brand name ‘Erba’ which has its footprints in several other countries.
3. A notice inviting tender was issued by the 2nd respondent/Karnataka State Drug Logistics and Warehousing Society which comes within the Department of Health and Family Welfare, Government of Karnataka for procurement of 1201 numbers of semi automated Bio-chemistry analyzer and 171 numbers of Fully Automated Biochemistry analyzer on 23-09-2020. It is the allegation of the petitioner that certain technical specifications that were sought in the tenders were not the standard conditions at par with the requirement in the industry. The requirement in the industry, according to the Company, was 200 tests per hour but the tender notification has fixed 220 tests per hour which nowhere in India such machine is installed. It is averred that there was a pre-bid meeting called and all the participants objected to the condition of 220 tests per hour in a particular machine. The Tender Scrutiny Committee did not accede to the objections of the petitioner and went on with the scrutiny of tenders and declared the 3rd respondent to be the successful bidder.
4. On the contract being awarded to the 3rd respondent, the petitioner had immediately knocked at the doors of the Appellate Authority under Section 16 of the Karnataka Transparency in Public Procurements Act, 1999 (‘the Act’ for short). Though sub-section (3) of Section 16 mandates that appeal be decided within 30 days of its filing, it was not taken up for its consideration which led the petitioner to knock the doors of this Court in Writ Petition No. 5387 of 2021. This Court by its order dated 24-03-2021 disposed of the writ petition with a direction to the Appellate Authority to dispose of the appeal. After the said direction, the Appellate Authority has dismissed the appeal by its order dated 09-11-2022 which forms the challenge in the subject petition.
5. Heard Sri Nataraja Ballal, learned counsel appearing for the petitioner, Sri B.V. Krishna, learned Additional Government Advocate appearing for respondent No. 1 and Sri Gangadhar R. Gurumath, learned senior counsel appearing for respondent No. 3.
6. The learned counsel appearing for the petitioner would seek to contend that the tender is floated with a norm that is not sought anywhere in the country. It is only to benefit the 3rd respondent that the said norm is stipulated, as no tenderer would be able to procure the machine which would run 220 tests per hour. The industry norm is 200 tests per hour. Therefore, he would contend that the tender is vitiated by such mala-fide intention, as it is floated only to suit the 3rd respondent. The learned counsel would further submit that the loss to the exchequer with the quotation of the successful bidder is also ignored by the State, as the 3rd respondent has quoted something more than what is available in the market. It is his submission that atleast that should have weighed in the mind of the Tender Scrutiny Committee before awarding the contract in favour of the 3rd resp