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IN THE HIGH COURT AT CALCUTTA
Sabyasachi Bhattacharyya, J.
S.B. Enterprise - Appellant
Versus
State Of West Bengal & Ors. - Respondents
W.P.A. No. 14 of 2023
Decided On : 09-01-2023
TENDER - ELIGIBILITY CRITERIA - WRITS - MAINTAINABILITY - FOOD SUPPLY - GOVERNMENT HOSPITALS - Single Work Experience Criteria - Aggregation of Credentials - Validity of Proforma NIT - Judicial Scrutiny - Public Interest - Arbitrariness - Mala Fides - Level Playing Field - Wednesbury Principle - Judicial Restraint - Cost Chart Revision - Maintainability of Writ Petition.
Fact of the Case:
Writ petition challenging the Memo and Communication regarding Notice Inviting Tender (NIT) guidelines for supply of cooked diet to indoor patients of Government Health Facilities in West Bengal. Petitioner contended that the eligibility condition requiring credential of similar nature of a completed single work having minimum value of 40% of the estimated amount put to tender or credentials of two similar nature of completed works, each having a minimum value of 30% of the estimated amount, was arbitrary and restrictive. Petitioner also challenged the provision for clubbing of credentials for all Government Health Facilities and hospitals in the State, arguing that it would give rise to monopoly and cartelization.
Finding of the Court:
1. The eligibility criteria stipulated in the impugned proforma NIT were not demonstrably capricious or arbitrary and had a realistic nexus with the nature of work, ensuring the resources and capacity of tenderers to sustain regular supply of four square meals to all indoor patients of Government hospitals and health facilities. 2. The aggregation of credentials for all hospitals was justified to assess the aggregate credentials of the bidders and ensure the supply of quality cooked food to the patients. 3. The terms of the proforma NIT were not tailor-made to suit any particular person or group of prospective bidders and did not violate the right to equality and fair treatment. 4. The petitioner failed to establish any patent arbitrariness, mala fides, or bias in the terms of the tender, or that the eligibility criteria were unworkable, unrealistic, or could not be satisfied by the majority of cooked diet suppliers. 5. The cost chart revision was based on the report of a Broad-Based Committee appointed by the Court and was valid for three years on a tentative basis. The petitioner failed to demonstrate that the rate charts had altered so much as to vitiate the entire terms of the proforma tender notification.
Issues: 1. Whether the eligibility criteria in the impugned proforma NIT were arbitrary, capricious, and violative of the principles of equality and fair treatment. 2. Whether the aggregation of credentials for all Government Health Facilities and hospitals was justified and did not lead to monopoly or cartelization. 3. Whether the cost chart revision was outdated and rendered the terms of the proforma NIT unworkable.
Ratio Decidendi: 1. The eligibility criteria in the impugned proforma NIT were not arbitrary, capricious, or violative of the principles of equality and fair treatment. The criteria had a realistic nexus with the nature of work and ensured the resources and capacity of tenderers to sustain regular supply of four square meals to all indoor patients of Government hospitals and health facilities. 2. The aggregation of credentials for all hospitals was justified to assess the aggregate credentials of the bidders and ensure the supply of quality cooked food to the patients. 3. The cost chart revision was based on the report of a Broad-Based Committee appointed by the Court and was valid for three years on a tentative basis. The petitioner failed to demonstrate that the rate charts had altered so much as to vitiate the entire terms of the proforma tender notification.
Final Decision: The writ petition was dismissed on the ground of not being entertainable on law and facts.
JUDGMENT
Sabyasachi Bhattacharyya, J. - The writ petitioner is a sole proprietorship firm having one Subhash Chandra Das as its proprietor. It does business of supplying cooked diet at the Jhargram District Hospital for some time. The writ petitioner has challenged Memo No.213(2)-HS(MS)/HFW-40040/5/2020 dated December 21, 2022 whereby the Proforma Notice Inviting Tender (NIT) incorporating the model terms and conditions of tenders for supply of cooked diet for indoor patients of Government Health Facilities in the State of West Bengal are to be floated.
2. The petitioner has also challenged a Communication dated December 22, 2022 forwarding such Memo.
3. The learned Senior Advocate for the petitioner contends that Clause 3 of the Notice Inviting Tender (NIT) of the impugned NIT guidelines provides as eligibility condition that the intending tenderers should produce credential of similar nature of a completed single work having minimum value of 40% of the estimated amount put to tender during the three years prior to the date of issue of the Notice or credentials of two similar nature of completed works, each having a minimum value of 30% of the estimated amount put to tender during the three years prior to the said date. A foot-note below Clause 3.1 indicates that one bidder can apply for more than one hospital subject to his credential being calculated on the sum total of the turn-over of all hospitals whereas the bidder had submitted his bid.
4. It is contended that such clubbing of credentials for all the Government Health Facilities and hospitals in the State would give rise to monopoly and cartelization and would restrict participation from all quarters. It is submitted that large operators would be benefitted by the said provision whereas the small operators like the petitioner, despite having previous experience in similar work, would be deprived of the opportunity even to participate in the tender process.
5. It is submitted that Clause 6.1 of the NIT speaks about 'administrative charge' for providing goods and/or services as a single percentage rate on the total cost of raw materials as noted in column F of the Table given in 6.2 for supply of the different categories of diets per health facility. The said chart in Clause 6.2 fixes the respective costs of raw materials including cooking gas on the basis of the report of a Broad-Based Committee which was constituted to determine the rationalised rate of cooking diet pursuant to an order of a co-ordinate Bench of this Court dated August 21, 2009 in W.P. No. 11766(W) of 2009 and another Order dated March 30, 2017 passed in W.P. No. 9208(W) of 2017. It is submitted by placing reliance on a photocopy of the revised rates of cooked diet as indicated in a Memo dated July 27, 2017 that the said revision was done as long back as on July 27, 2017, which was to be valid for three years 'until further orders'. However, even in the year 2022, the said chart has not been updated to tally with the current prices of goods and commodities. As such, not only would the quality and standard of the food supplied to the in-patients suffer but the monopoly of certain big players would be facilitated.
6. By way of an example, the learned Senior Advocate for the petitioner refers to a table of rates quoted by big contractors at highest administrative charge in certain premier hospitals, as annexed at page 107 of the writ petition. It is pointed out that only some large operators have monopolised between themselves the work issued for particular Government Hospitals by quoting competitive rates in tandem. It is also indicated that in the Sub-divisional Hospitals and District Hospitals and State General Hospitals, the said large players have mostly quoted zero per cent administrative charge whereas for city hospitals, low rates have been quoted by them. Such practice gave rise to cartelization, it is argued.
7. The learned Senior Advocate goes on to cite certain judgments in support of his contention
The eligibility criteria in a tender for supply of cooked diet to Government hospitals, requiring credential of similar nature of a completed single work having minimum value of 40% of the estimated ....
Eligibility criteria in tenders must be reasonable and serve public interest, and courts will not interfere unless proven arbitrary or malicious.
Judicial review of tender conditions is limited; courts should not interfere unless actions are arbitrary, discriminatory, or mala fide, ensuring public interest is prioritized.
The main legal point established in the judgment is the limitation of judicial review in tender matters, the need for commercial prudence in evaluating tenders, and the importance of fairness and non....
Point of Law – The principles that emerge from the above precedents are, the writ court has limited jurisdiction in matters concerning contracts and invitation to bid for contract; Court must adopt r....
The court upheld the validity of the tendering authority's criteria, emphasizing that terms are not subject to judicial review unless proven arbitrary or unreasonable.
Judicial review in public procurement is limited; courts refrain from interference unless clear evidence of arbitrariness or bad faith is established.
Judicial review is permissible in tender matters only to prevent arbitrariness; criteria should ensure fairness and cannot favor specific bidders without rational basis.
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